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Pound Trading Statically ahead of Queen's Speech, Euro Edges Higher as German Confidence Climbs and US Dollar Weakens on Overvaluation

Published: 27 May at 10 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, Germany, Greece,

Pound Sterling (GBP)
After having registered better-than-expected retail sales in May, the Confederation of British Industry (CBI) now expects British sales to reach a 26-year high over the coming month. This is based on the negative consumer prices and the record-low lending rate. The positive report saw the Pound edge higher on Tuesday, although the appreciation was somewhat sluggish as the prospect of a period of uncertainty during an EU referendum hindered investment.
Wednesday has seen the Pound hold gains and generally trading statically as markets await the Queens Speech, in which the core policies of the new Conservative government will be outlined.

Euro (EUR)
In response to Greek officials talking down the fallout from a Greek exit from the Eurozone, and with continued resilience against enforcing strict austerity measures, the shared currency softened on Tuesday. The prospect that the Hellenic nation will leave the currency bloc is strengthening with every passing day, especially with snail-paced progress in talks with the Eurogroup of creditors and the International Monetary Fund (IMF).
Wednesday has seen a fractional single currency recovery after domestic data bettered estimates. German Consumer Confidence was forecast to tick lower from 10.1 to 10.0, but the actual result reached 10.2.

US Dollar (USD)
After Federal Reserve Chair Janet Yellen stated that the benchmark interest rate would rise before the end of the year provided domestic data picked up, positive data results have been met with a bullish US Dollar. Tuesday’s data was no exception as Durable Goods Orders met with estimates and Consumer Confidence eclipsed expectations.
Wednesday morning has seen the ‘Greenback’ (USD) edge lower, albeit fractionally, which could be the result of traders locking profits. It is also likely that the US Dollar is trending lower in response to fears that the high valued Dollar will weigh on policymaking.

Australian Dollar (AUD)
In response to rate hawks bring forward bets as to the timing of a Federal Reserve rate hike, the Australian Dollar softened amid fears of a long period of low risk-appetite. Tuesday saw the ‘Aussie’ (AUD) continue the downward trend after positive US data fuelled speculation that the Fed would liftoff within the year.
Although the US Dollar has edged lower on Wednesday, the ‘Aussie’ remains weak. Mixed US data contributed to the declination in conjunction with dampened risk appetite as Greece’s bridges continue to burn.

New Zealand Dollar (NZD)
As with it Oceanic counterpart, the New Zealand Dollar softened in response to the Bullish US asset. The ‘Kiwi’ also softened amid speculation that the Reserve Bank of New Zealand (RBNZ) will intervene in order to devalue the risk-correlated asset.
Although Wednesday has seen both South Pacific assets trending lower, a positive increase in China’s Industrial Profits slowed the depreciation somewhat.

Canadian Dollar (CAD)
As traders await the Bank of Canada (BOC) interest rate decision, the ‘Loonie’ edged lower versus many of its peers. However, most economists expect the bank to hold rates after officials reassured that Canada was resilient against low oil prices.
As of Wednesday, 27th May 2015, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.4079, GBP USD exchange rate was 1.5353, GBP AUD exchange rate was 1.9857, GBP NZD exchange rate was 2.1152, GBP CAD exchange rate was 1.9119, and GBP CNY exchange rate was 9.5206.
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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