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Another RBA Rate Cut on the Horizon?

Published: 4 Jul at 4 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, Germany,

Pound Sterling (GBP) Under Pressure as Brexit Pessimism Looms

Sterling (GBP) remained under pressure on Thursday as Brexit Secretary Steve Barclay stated that a no-deal Brexit could trigger a recession.

When asked if he could rule out the UK suffering a recession due to a no-deal Barclay simply stated ‘Well, no.’

Meanwhile, looking ahead to Friday, Pound sentiment could rise following the release of the Halifax house price data.

If prices rise higher than forecast it could provide an upswing of support for Sterling.

Pound Euro (GBP/EUR) Exchange Rate Flat as German Construction Activity Stagnates

On Thursday the Pound Euro (GBP/EUR) exchange rate was left flat as data revealed the German construction activity stagnated in June.

The single currency was left under pressure as the PMI fell to a neutral 50, down from May’s reading of 51.4.

Meanwhile, looking ahead to Friday it is likely the Euro will slide following the release of the German factory orders.

If factory order slump further than forecast, it could dampen sentiment in the single currency.

Pound US Dollar (GBP/USD) Exchange Rate Muted Ahead of Non-Farm Payrolls

The Pound US Dollar (GBP/USD) exchange rate remained muted as US markets were shut due to Independence Day.

Meanwhile, according to the Trump administration top representatives from the US and China are set to resume trade talks next week.

While White House Economic Advisor, Larry Kudlow was unclear of when face-to-face talks would resume, he stated that they would begin ‘soon’.

Looking ahead to Friday, the US Dollar is likely to rise following the release of the US non-farm payrolls.

If payrolls data rises higher than forecast it could give a clearer indication that the Federal Reserve are unlikely to slash interest rates in the near-term, which could buoy the ‘Greenback’.

Pound Canadian Dollar (GBP/CAD) Exchange Rate Muted as US-Iran Tensions Increase

The Pound Canadian Dollar (GBP/CAD) exchange rate remained muted on Thursday as markets remained largely unaffected by the detention of a super tanker by British Royal Marines.

The tanker was possibly taking Iranian crude oil to Syria as tensions between the United States and Iran have increased.

Meanwhile, looking towards Friday the Canadian Dollar could slide against Sterling following the release of the Canadian unemployment rate.

If unemployment increases higher than expected, it could dampen sentiment in the ‘Loonie’.

Pound Australian Dollar (GBP/AUD) Exchange Rate Flat as Aussie Retail Sales Disappoint

The Australian Dollar (AUD) remained flat against the Pound (GBP) as data revealed that Aussie retail sales rose by a lower-than-forecast 0.1%.

Added to the disappointing sales data, job vacancies fell from record highs which has added to signs that the Reserve Bank of Australia (RBA) may have to cut rates for the third time this year.

Meanwhile, looking ahead to this evening the ‘Aussie’ could slide following the AiG Performance of Construction Index.

If the index slumps further than forecast it could dampen sentiment in the Australian Dollar.

Pound New Zealand Dollar (GBP/NZD) Exchange Rate Rises as China Says Existing Tariffs Must be Removed

On Thursday afternoon the New Zealand Dollar (NZD) slumped against Sterling (GBP) as China’s Commerce Ministry said existing US tariffs would have to be removed in order to reach a trade deal.

However, Commerce Ministry spokesman, Gao Feng revealed that trade teams from both countries were in contact.

Looking ahead to the end of this week and the start of next week’s session, the ‘Kiwi’ could rise following further reports on the progress of US-China trade talks.

If reports reveal that trade talks are progressing successfully, the Pound New Zealand Dollar (GBP/NZD) exchange rate could fall.

As of Thursday, 4th July 2019, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1146, GBP USD exchange rate was 1.2582, GBP AUD exchange rate was 1.791, GBP NZD exchange rate was 1.8799, GBP CAD exchange rate was 1.6417, and GBP CNY exchange rate was 8.6457.
Dominic Lee About Author: (474 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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