Published: 1 Feb at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada,
The Pound (GBP) rallied against the other majors this afternoon after an EU report on the consequences of Brexit was leaked to the media.
The report, created by officials at the EU’s economic and monetary affairs (Econ) suggests that the City of London should be protected in Brexit negotiations in order to prevent unnecessary damage to the economies of the remaining members of the EU.
However Sterling may struggle to extend its gains on Thursday as economists forecast that the Bank of England will vote to keep interest rates unchanged, despite the recent uptick in inflation.
The Pound Euro (EUR) exchange rate skyrocketed on Wednesday as the EU’s position in Brexit negotiations was weakened by a leaked report.
The document warns that the Eurozone’s economy could also be negatively impacted by Brexit should an amicable deal not be reached with the UK thanks to the continent's reliance upon London’s financial sector.
The common currency may stage a comeback tomorrow however as Europe Central Bank President Mario Draghi makes a speech in Ljubljana with investors hoping that he will hint towards the tapering of the Bank’s stimulus programme following a rise in Eurozone inflation.
Sterling struck a new weekly high against the US Dollar (USD) today, jumping by around a cent following the release of the leaked EU document.
The ‘Greenback’ was also weakened by speculation that Donald Trump seeks to devaluate USD as his administration reportedly abandons the nation’s two-decade-old "strong dollar" policy.
The Federal Reserve will meet later this evening for its latest policy meeting. While traders do not expect the Fed to alter its monetary policy at today’s session they are optimistic that there may be some hints towards a rate hike in March, possibly strengthening the US Dollar.
The Pound Canadian Dollar (CAD) exchange rate trended higher on Wednesday as market sentiment was improved by a report that suggested that the EU would be willing to compromise on Brexit.
The ‘Loonie’ struggled to recover its losses thanks to volatile oil prices, with concerns over the effectiveness of OPEC production cuts overshadowing a rise in the domestic Manufacturing PMI.
Sterling jumped against the Australian Dollar (CAD) during today’s session as the leaked EU paper strengthened the UK government’s position ahead of the upcoming Brexit negotiations next month.
However the ‘Aussie’ may rally over night following the release of the latest Trade Balance data, with figures expected to show that Australia
’s trade surplus grew from $1.24bn to $2.2bn in December.
The Pound New Zealand Dollar (NZD) exchange rate shot up by around two cents on Wednesday following an unexpected surge in New Zealand’s unemployment rate as it rose from 4.9% to 5.2% in the fourth quarter of 2016.
As of Wednesday, 1st February 2017, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1757, GBP USD exchange rate was 1.2659, GBP AUD exchange rate was 1.6696, GBP NZD exchange rate was 1.7452, and GBP CAD exchange rate was 1.6519.