Published: 29 Jan at 11 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, Germany,
Pound Sterling (GBP) Flat Ahead of BoE Meeting
Sterling (GBP) remained a handful of currencies on Wednesday as Thursdayâ€™s Bank of England (BoE) monetary policy meeting crept closer.
The Pound remained flat as investors continued to be cautious about the outcome of the meeting, with many expecting the bank to slash interest rates for the first time since 2016.
However, as the chance of the rate cut is still around 50:50, if the bank does cut rates tomorrow, it could cause Pound Sterling (GBP) exchange rates to plummet.
Pound Euro (GBP/EUR) Exchange Rate Muted as Safe Haven Demand Weakens
The Pound (GBP) remained flat against the Euro (EUR) on Wednesday as demand for safe haven currencies diminished.
The single currency could not be buoyed by better-than-expected German consumer morale, which also saw Januaryâ€™s figure upwardly revised. Confidence in the blocâ€™s largest economy increased as the export-reliant nation saw an upswing in optimism following the signing of the US-China
phase one trade deal.
Looking ahead, EUR could rise against the Pound if the Eurozoneâ€™s January business confidence index rises higher than expected.
Pound US Dollar (GBP/USD) Exchange Rate Flat Ahead of Fed Rate Decision
The Pound US Dollar (GBP/USD) exchange rate remained flat ahead of the US Federal Reserve interest rate decision later today.
While the Fed is likely to leave interest rates on hold, it is likely officials will discuss some possible changes to the bankâ€™s overnight borrowing rate.
Meanwhile, the lower demand for safe-haven currencies also left the â€˜Greenbackâ€™ under pressure.
Looking ahead to this evening, if Fed policymakers are overly dovish it could send USD lower. However this could be reversed on Thursday if the Bank of England slashes rates.
Second Day of Oil Price Gains Leaves Pound Canadian Dollar (GBP/CAD) Exchange Rate Flat
The Canadian Dollar (CAD) was left largely flat against the Pound (GBP) as oil prices rose for the second day in a row.
The oil-sensitive â€˜Loonieâ€™ was buoyed after OPEC announced it would extend oil output cuts if the spread of the Wuhan coronavirus hurt oil demand. Added to this, a decline in US oil stockpiles provided prices with a helping hand.
Looking ahead, if oil prices continue to rise it will provide further support for CAD, and could allow the Canadian currency to rise against GBP if the BoE slash rates.
Pound Australian Dollar (GBP/AUD) Exchange Rate Muted on Weak Aussie Inflation
Lower demand for safe haven assets benefitted the Australian Dollar (AUD), leaving it flat against the Pound (GBP) despite disappointing Aussie inflation data.
Core Australian inflation failed to meet the Reserve Bank of Australia
â€™s (RBA) target for the fourth year in a row, at a subdued 1.6% in Q4 2019. Weak inflation suggests the bank may need to act further to revive the Consumer Price Index (CPI).
Looking ahead, the Australian Dollar could make gains if investor demand for safe haven assets continues to diminish.
Pound New Zealand Dollar (GBP/NZD) Exchange Rate Flat as Risk Appetite Steadies
The Pound New Zealand Dollar (GBP/NZD) exchange rate remained flat as demand for riskier currencies steadied as investors waited for further news about the Wuhan coronavirus.
Moves were still slight as it was very clear that markets remained on edge as the death toll for the virus surpassed 130.
Meanwhile, the â€˜Kiwiâ€™ could edge higher against the Pound if Decemberâ€™s New Zealandâ€™s trade balance impresses.
As of Wednesday, 29th January 2020, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1821, GBP USD exchange rate was 1.3021, GBP AUD exchange rate was 1.9289, GBP NZD exchange rate was 1.9949, GBP CAD exchange rate was 1.7187, and GBP CNY exchange rate was 9.0323.