Published: 19 Feb 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)
The Pound has traded tightly against the Euro and dropped by -0.3% against the US Dollar on 19th February, following a warning from MEP Guy Verhofstadt.
Mr Verhofstadt has warned about the unpalatability of UK plans to reduce the rights of EU citizens who enter the UK during the transitional period, saying;
‘It’s not acceptable for us that rules will continue without change for financial services, for goods, for whatever other business, and only for the citizens, their situation will change.
That is penalising citizens’.
Brexit talks continue to plod on in February, with a current lack of major announcements leaving statements like Verhofstadt’s as negative influences.
The Pound may fall further in value on 20th February, if Confederation of British Industry (CBI) data about industrial orders shows slowing activity in February.
On Monday afternoon, the Euro has appreciated against the Pound but fallen back against the US Dollar.
The day’s main Eurozone data concerned construction output in December and showed reduced growth of 0.5% during the month.
The Euro’s losses could expand on 20th February, as ZEW surveys of economic confidence are tipped to show falling levels of optimism.
US Dollar (USD)
Although there hasn’t been any US economic data out on Presidents’ Day (19th February), the US Dollar has still managed to rise by at least 0.3% against the Pound and Euro.
This appreciation is down to trader optimism, ahead of the release of Federal Reserve minutes on Wednesday evening.
The minutes could point to the next likely date for a Federal Reserve interest rate decision, which is something of a hot topic among USD traders in 2018.
If the minutes suggest that policymakers are considering a near-term interest rate hike, the US Dollar could rise sharply against the Pound and the Euro.
Australian Dollar (AUD)
A gloomy economic outlook from Westpac Bank has left the Australian Dollar making limited movement today, with the currency trading tightly against the Pound, Euro and US Dollar.
The latest growth forecasts from the bank have been worse than those of the Reserve Bank of Australia
(RBA), a contrast that has not gone unnoticed by AUD traders.
The RBA will remain in the spotlight in the near-term, when minutes from the early February policy meeting come out.
If the RBA’s minutes point towards a long-awaited Australian interest rate hike in 2018, the Australian Dollar could rise sharply against the Pound, Euro and US Dollar.
With the US Dollar appreciating on Monday afternoon, the New Zealand Dollar has conversely fallen in value as risk demand among traders decreases.
The NZD has also slipped because of the weekend’s services PSI for January, which showed a minor slowdown in sector activity during the month.
The New Zealand Dollar could rally on Tuesday if the Global Dairy Trade price index shows significant growth.
The index measures changes in global dairy prices and rose by 5.9% earlier in February.
If the late-February reading shows further growth, this will mean better conditions for NZ dairy exporters.
Canadian Dollar (CAD)
The Canadian Dollar has lost ground to the Pound, Euro and US Dollar on 19th February, following a cautious statement from Finance Minister Bill Morneau.
Commenting on the latest US tax cuts, Mr Morneau has stated that the Canadian government will not ‘act in an impulsive way’ to adjust fiscal policy.
The main focus has been on US corporation tax, which has been cut from 35% to 21% - this has raised concerns that Canada
will become less competitive unless similar cuts are put in place by the Canadian government.
The Canadian Dollar may be affected by retail sales data out on 22nd February; if the core reading slows from 1.6% to 0.3% as forecast then the CAD could slump in value.
As of Monday, 19th February 2018, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1286, GBP USD exchange rate was 1.399, GBP AUD exchange rate was 1.7697, GBP NZD exchange rate was 1.8998, and GBP CAD exchange rate was 1.7576.