GBP Exchange Rates Firm on Economic Hopes, Pound Euro Soars
GBP exchange rates trended higher yesterday, with the Pound Euro exchange rate hitting a one-week high at €1.16.
The Pound traded with modest gains against many of its peers as investors continued to digest Chancellor Rishi Sunak’s 2021 Budget.
Despite ongoing concerns over corporate tax hikes, GBP investors seem broadly optimistic the additional measures announced by the Chancellor will support a swift rebound in UK economic growth this year.
Looking ahead, the focus for GBP investors through the end of this week looks to be on UK coronavirus statistics, where a continued fall in new cases will enable the government to move ahead with its reopening plans.
The Pound Euro exchange rate has retreated this morning, however. Sterling is struggling across the board as the US Dollar rebounds, sending GBP/USD tumbling.
Euro (EUR) Slumps on Dire Retail Sales Release
The Euro was on the defensive through Thursday’s trading session on the back of abysmal retail sales figured from the Eurozone.
Sales growth in the bloc plummeted from 1.8% to –5.9% in January, falling well below expectations for a more modest contraction of 1.1% and striking its worst levels since the bloc’s first full month of lockdown back in April.
The Euro looks to be off to a better start today, however, after Germany reported January brought a rebound in factory orders.
USD strength is continuing to push the Euro US Dollar exchange rate lower to $1.19. Meanwhile, the Euro has recovered some of yesterday’s losses against the Pound so far today.
US Dollar (USD) Soars Following Powell Comments
The US Dollar ticked lower during yesterday’s European session, as a pullback in US Treasury yields undermined the appeal of the ‘Greenback’ in spite of US jobless claims printing below expectations.
However, the ‘Greenback’ then skyrocketed following a speech from Federal Reserve Chair Jerome Powell later in the evening as his dovish comments saw US bond yields rally sharply.
Centre stage today will be the publication of the latest US non-farm payroll figures. Economists are forecasting a healthy expansion of payroll numbers last month, which if correct is likely to boost the appeal of the ‘Greenback’.
USD exchange rates are making solid gains ahead of the US payrolls release. A risk-off mood and rise in bond yields have bolstered the safe-haven ‘Greenback’ again, pushing the US Dollar Pound exchange rate over 0.6% higher and USD/EUR up 0.3%.
Canadian Dollar (CAD) Strengthens as Oil Prices Soar to 14-Month High
The Canadian Dollar struck higher on Thursday, as the commodity-linked ‘Loonie’ was underpinned by a sharp uptick in oil prices following OPEC’s decision to maintain its current output cuts.
Australian Dollar (AUD) Undermined by USD Strength
The Australian Dollar trended lower overnight on Thursday, as a sharp upswing in the US Dollar yesterday evening took its toll on the risk-sensitive ‘Aussie’.
New Zealand Dollar (NZD) Weakens in Risk-Off Trade
The New Zealand Dollar also stumbled in overnight trade, as the appeal of the ‘Kiwi’ was capped by USD strength and a sell-off in equity markets.