Published: 11 Feb at 1 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China,
Weak Economic Growth Leaves Pound Sterling (GBP) Under Pressure
Sterling (GBP) remained under pressure today after Q4 2019 growth data showed the economy stagnated as the country wrestled with an ongoing Brexit deadlock.
Data also showed that over the course of the year, the economy grew by 1.4%, up from 1.3% growth in 2018. However, the mediocre growth weighed on the currency, leaving it flat.
Looking ahead, due to a lack of economic data over the course of the week, GBP will likely react to any news about UK-EU trade negotiations. If tensions continue to rise between the UK and the bloc, Sterling will slump.
Pound Euro (GBP/EUR) Exchange Rate Muted as Risk Appetite Increases
The Euro (EUR) was left flat against the Pound (GBP) as risk appetite increased, sending investors away from safe-havens and towards riskier assets.
The single currency slipped as fears the spread of the Wuhan coronavirus could cause the Eurozone’s economy to suffer increased.
The Euro could suffer losses on Wednesday after the release of the bloc’s industrial production data. If production slumps more than expected at the end of 2019, EUR will slump against the Pound.
Pound US Dollar (GBP/USD) Exchange Rate Flat Ahead of Fed Powell Speech
The Pound US Dollar (GBP/USD) exchange rate remained flat on Tuesday ahead of Federal Reserve Chair Jerome Powell’s twice-a-year update to Congress.
Despite the risk the Wuhan coronavirus places on the global and US economies, markets expect the head of the Fed to remain upbeat.
Powell is expected to testify again tomorrow, and if his outlook for the economy is optimistic it could boost the ‘Greenback’.
Pound Canadian Dollar (GBP/CAD) Exchange Rate Muted as Oil Prices Rise 1%
The Pound (GBP) was left flat against the Canadian Dollar (CAD) this morning as investors remained wary about the Wuhan coronavirus despite oil prices rising around 1%.
However, the oil-sensitive ‘Loonie’ remained under pressure as oil benchmarks were still over 20% lower than their peaks in January.
Looking ahead, the Canadian Dollar could make some gains this week if oil prices continue to rise.
Pound Australian Dollar (GBP/AUD) Exchange Rate Flat as Xi Warned Attempts to Stop Virus Could Hurt Economy
The Pound Australian Dollar (GBP/AUD) exchange rate remained largely flat despite the ‘Aussie’ gaining support from an upswing in risk appetite.
However, reports revealed this morning that Chinese President Xi Jinping warned top officials that efforts to contain the virus had gone too far, and this threatened the country’s economy.
This likely weighed on the ‘Aussie’ which is strongly linked to the Chinese economy.
Meanwhile, AUD could edge higher if risk appetite continues to rise. If reports show the spread of the virus appears to be slow once again, the ‘Aussie’ will rise.
Pound New Zealand Dollar (GBP/NZD) Exchange Rate Muted Ahead of RBNZ Interest Rate Decision
The New Zealand Dollar (NZD) remained muted against Sterling (GBP) on Tuesday ahead of the upcoming Reserve Bank of New Zealand (RBNZ) interest rate decision.
However, the increase in risk appetite amongst traders prevented NZD from slumping over the course of the day.
While the bank is expected to leave rates unchanged, if policymakers are overly dovish during the press conference that follows, ‘Kiwi’ sentiment will be left dampened.
As of Tuesday, 11th February 2020, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1862, GBP USD exchange rate was 1.2954, GBP AUD exchange rate was 1.9282, GBP NZD exchange rate was 2.0225, GBP CAD exchange rate was 1.7214, and GBP CNY exchange rate was 9.0236.