Published: 25 Jul at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China,
Pound Sterling (GBP)
Today has seen the Pound make limited movement against the Euro and US Dollar, due to persistent uncertainty about the state of the UK economy.
The latest mixed message has come from the Confederation of British Industry (CBI), which has released distributive trade data covering retail activity in July.
The activity measure showed a decline from 32 points to 20; while negative, this result still beat forecasts for a worse reading of 15 points.
There isn’t any high-impact UK data out for the rest of the week, so the Pound could next be affected by the coming Tuesday’s GfK consumer confidence reading.
This is tipped to decline from -9 points to -10, which could cause early-week GBP exchange rate losses.
As with the US Dollar, today’s Euro movement has been partly influenced by uncertainty about an upcoming meeting of US and European Commission leaders.
The meeting is ostensibly to repair the US-EU relationship and prevent a further escalation of the current trading conflict, but economists are unsure of how productive the talks will be.
This lack of certainty and confidence has caused the Euro to decline against the US Dollar and the Pound, in addition to posting losses in other currency pairings.
EUR traders may have their attention diverted by Thursday’s European Central Bank (ECB) interest rate meeting, which has the potential to boost the single currency.
ECB policymakers are unlikely to hike interest rates, but could still raise EUR exchange rates if they suggest that a hike could come early in 2019.
US Dollar (USD)
The US Dollar has advanced against the Euro and traded tightly against the Pound today, in addition to making steady movement against its other regular peers.
This mixed performance comes in the lull before a major meeting between US President Donald Trump and European Commission President Jean-Claude Juncker.
The latest US news has been supportive of USD movement, with a drop in US crude oil stocks pushing prices higher and supporting US exporters.
Getting back to the US-EU meeting, Mr Juncker is expected to try and defuse tensions between the two parties and potentially decrease tariff impositions.
Hopes are slim for these efforts bearing success, but the potential for a positive outcome has still pushed the US Dollar up and could cause further gains.
Australian Dollar (AUD)
With the US Dollar regaining lost strength from earlier in the day, risk sentiment has fallen and the Australian Dollar has found itself in lower demand.
The Australian currency has also been weakened by earlier inflation rate figures, which showed growth in Q2 2018 but not up to the forecast level.
Below-forecast inflation lowers the chances of the Reserve Bank of Australia
(RBA) raising interest rates; for many AUD traders, higher rates are long overdue.
Looking ahead, the Australian Dollar may be able to appreciate on the coming Tuesday when a measure of building permits comes out.
Covering June, the monthly reading is expected to show an AUD-supporting 1.90% rise in permits granted.
The New Zealand Dollar has fallen against the Chinese Yuan and traded tightly against the Pound, Euro and US Dollar today.
This mixed movement follows last night’s unexpectedly negative annual trade balance data for June.
This showed a drop from the surplus range at NZ$208m to a deficit of NZ$-113m, the widest June annual deficit in a decade.
There may be more definitive New Zealand Dollar losses on Thursday evening, when a measure of NZ consumer confidence is predicted to show a decline from 120 points to 119.
Canadian Dollar (CAD)
The latest US crude oil stock data has proven beneficial for the Canadian Dollar, which has rallied against the Pound, Euro and US Dollar on news of higher oil prices.
Oil is a key export from Canada
and as in the US, higher prices benefit national exporters and help support the industry.
The next major Canadian economic data is some way off, consisting of GDP data for May which is out next Tuesday.
April saw a minimal 0.1% GDP growth reading, so any sign of a strong pickup could be enough to boost the Canadian Dollar.
As of Wednesday, 25th July 2018, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1247, GBP USD exchange rate was 1.3191, GBP AUD exchange rate was 1.7709, GBP NZD exchange rate was 1.9296, GBP CAD exchange rate was 1.7209, and GBP CNY exchange rate was 8.931.