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Tue 1 Dec 2020 23:55GMT

GBP Weaker on Inflation Speculation, EUR/USD at Nine-Month Low

Published: 12 Jan at 2 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China,

Pound Sterling
Bets that tomorrow’s UK inflation report will show a slowing in consumer price gains pushed the Pound close to an 18-month low against the US Dollar on Monday. The British asset also struggled against the Euro in spite of European Central Bank stimulus speculation weighing on the common currency. The day’s only UK data, the Lloyds Employment Confidence report, also registered a decline.

US Dollar
Although last Friday’s mixed US employment data saw investors revise their projections for the first Federal Reserve interest rate increase, the US Dollar maintained a bullish relationship with several of its most traded currency counterparts. Today’s US labour market conditions index could be responsible for further ‘Greenback’ movement.

The Euro struggled against peers like the US Dollar on Monday as investors speculated on the quantitative easing measures likely to be deployed by the European Central Bank at its upcoming meeting. The Euro to US Dollar (EUR/USD) exchange rate approached a nine-year low.

Australian Dollar
Although gold prices climbed, the Australian Dollar eased lower against both the Pound and Euro in response to disappointing domestic data. Australian home loans unexpectedly fell by -0.7% while investment lending slid -2.2% on the month. China’s trade report, due out during Australasian trading, could be responsible for additional ‘Aussie’ volatility.

New Zealand Dollar
While the ‘Kiwi’ fell in reaction to Friday’s mixed US employment report, some investors are predicting that a lack of domestic data could see the New Zealand Dollar advance over the course of this week. The low-volatility New Zealand Truckometer report and ANZ Consumer Confidence survey are unlikely to have much of an impact on the ‘Kiwi’s performance.

Canadian Dollar
A slide in oil prices and Canada’s disappointing employment data saw the Canadian Dollar end last week trending in a broadly softer position. The Canadian Dollar to US Dollar exchange rate brushed an over five-year low. In the hours ahead, modest ‘Loonie’ movement could be caused by Canada’s Business Outlook Future sales report. Any shifts in commodity prices may also prove influential.
As of Monday, 12th January 2015, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.2822, GBP USD exchange rate was 1.5169, GBP AUD exchange rate was 1.8613, GBP NZD exchange rate was 1.9534, GBP CAD exchange rate was 1.8157, and GBP CNY exchange rate was 9.4097.
Patrick James About Author: (289 Posts)Patrick completed his economics degree just as the global financial crisis struck in 2008. In the intervening years Patrick has made his mark, climbing to a prominent position within a large financial services provider. As part of his role Patrick uses his expertise to advise companies of the best ways to safeguard against currency risk.

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