Published: 1 Mar at 4 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada,
Pound Sterling (GBP)
On 1st March, as the UK is battered by extreme weather conditions, the Pound has dropped in value against the Euro and the US Dollar.
This GBP deterioration comes after news that the UK manufacturing PMI for February has seen growth slow to an eight-month low.
Sterling could still recover on 2nd March when UK construction activity data is released – if the PMI for February rises as expected then the Pound could advance against the Euro and US Dollar.
As with the UK, Eurozone manufacturing data has also been released today.
While both readings fell, the Euro has nonetheless advanced against the Pound and seen a late spike up against the US Dollar as well on 1st March.
The difference between responses to the UK and Eurozone PMI readings is that there are signs of underlying resilience in the Eurozone manufacturing sector.
On a quiet close to weekly trading, the Euro may be influenced by the Eurozone PPI readings for January; if they show an unexpected rise in producer prices then the Euro could advance further.
Higher PPI readings indicate higher prices across the Eurozone, which could lead to an all-important inflation rate rise in the coming months.
US Dollar (USD)
The US Dollar has advanced against both the Pound and Euro today, having been supported by a pair of positive economic events.
One of these has been another day of testimony by Federal Reserve Chair Jerome Powell.
Mr Powell has stated that he doesn’t perceive a high risk of the US economy overheating, which has fired speculation about additional interest rate hikes in 2018.
Further USD support has come from the ISM manufacturing PMI reading for February, which has shown growth when a slowdown was originally forecast.
The week’s last US data will be Friday afternoon’s finalised University of Michigan consumer confidence score for February.
The reading is predicted to show significant growth, which could push the US Dollar up even higher against the Pound and Euro during daily trading.
Australian Dollar (AUD)
With the US Dollar firming and Australian manufacturing levels reported to have slowed, the Australian Dollar has still managed to rise against the Pound, Euro and US Dollar.
This strong performance comes ahead of the Reserve Bank of Australia
’s (RBA) interest rate decision on 6th March, when the central bank could outline monetary policy plans for the coming months.
Interest rates aren’t expected to be changed, but the potential for an AUD advance remains.
The New Zealand Dollar is set to close trading on Thursday at the top of the pack, having advanced notably against the Pound, Euro and US Dollar.
This all-round NZD rally has been brought on by an improvement in January’s business confidence reading, in addition to the country seeing the best terms of trade since 1973.
Terms of trade relate to the purchasing power of New Zealand compared to the rest of the world, in part thanks to rising prices of national exports such as dairy products.
The New Zealand Dollar could see a slight decline in value in the near-term when consumer confidence figures come out; these are tipped to reveal a small dip in February.
Canadian Dollar (CAD)
The Canadian Dollar has firmed against the Pound today but dropped against both the Euro and US Dollar.
Manufacturing activity in the country has reportedly slowed in February, while a negative reception to the 2018 budget has also harmed the CAD.
Canadian businesses have criticised the lack of new policies to increase competition with the US, which has recently taken the nuclear option and cut corporation tax.
The last chance for a Canadian Dollar advance this week will be Friday’s second estimates for GDP growth in Q4 2018.
Fortunately for CAD traders, current predictions are for higher levels of growth so a late-week CAD exchange rate rise isn’t completely out of the question.
As of Thursday, 1st March 2018, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1225, GBP USD exchange rate was 1.3774, GBP AUD exchange rate was 1.7741, GBP NZD exchange rate was 1.8958, and GBP CAD exchange rate was 1.7674.