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Cautious BoE Remarks Drag on Pound Exchange Rates

Pound News: Contrasting Views from BoE Cause Sterling Volatiity

Uncertainty about the Bank of England’s (BoE) plans for monetary policy left the Pound (GBP) unsettled yesterday.

Traders were focused on comments made by BoE policymaker Silvana Tenreyro, who stated that there was ‘ample time’ before interest rates might need to be raised again.

The Pound could climb before the weekend if today’s retail sales figures show growth in consumer spending.

 

Euro News: Signs of Greater Eurozone Integration Boost EUR

The Euro (EUR) slipped against the South African Rand yesterday but gained against a number of the majors.

There were signs that France and Germany are both willing to press ahead with greater integration within the currency bloc, which could reduce its vulnerability to economic threats in the future.

There is little high-impact Eurozone data out today, so EUR exchange rates may instead be shifted if there are any developments in German coalition discussions.

 

US Dollar News: USD Rates Lowered by Dovish Fed Outlook

The US Dollar (USD) struggled yesterday, posting significant losses against the Pound and Euro.

Comments from Federal Reserve policymaker Charles Evans lowered demand for the US Dollar, after Evans stated that fewer interest rate hikes were ‘probably appropriate’.

The US Dollar may be able to recover if today’s University of Michigan consumer confidence figure rises. The initial reading for January is tipped to show a small increase in sentiment.

 

Canadian Dollar News: Growing Concerns over NAFTA Weigh on CAD

After the recent Bank of Canada (BOC) interest rate hike failed to raise demand for the Canadian Dollar (CAD), the currency fell further on trade-based concerns yesterday.

Although economists have predicted harm for the US economy if the country withdraws from the NAFTA deal, such a move would also damage the Canadian economy.

Today’s manufacturing sales figures could cause the Canadian Dollar to regain lost ground if they show improvement.

 

Australian Dollar News: AUD Unsettled by Rising Unemployment

A mixed set of employment figures left the Australian Dollar (AUD) falling against the Euro and Pound yesterday, although an advance against the US Dollar was also seen.

AU unemployment unexpectedly rose from 5.4% to 5.5%, but this was explained by a higher participation rate. Higher numbers of employed persons failed to translate to overall AUD gains.

Iron ore prices might be the deciding factor in Australian Dollar movement today, with further price declines having the potential to weigh on the ‘Aussie’.

 

New Zealand Dollar News: Fading Political Fears Boost NZD Rates

A restoration of confidence in the New Zealand government triggered moderate New Zealand Dollar (NZD) gains yesterday, with the currency advancing against the Australian Dollar and US Dollar.

NZD had fallen earlier in the week when a drop in business confidence was attributed to uncertainty about the new Labour-New Zealand First coalition government.

There is no significant economic news out of New Zealand today, so the New Zealand Dollar could instead be influenced by any major US Dollar movements and general risk sentiment.

 

Upcoming Data

Friday, 19 January

09:30    UK Retail Sales

13:30    CA Manufacturing Sales

15:00    US University of Michigan Consumer Confidence

Joe Mayhew 

Currency Dealer

01442 892 069

 

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