Pound Sterling

Pound Extends Gains as BoE Downplays Negative Rates

Pound News: GBP Buoyed by BoE Dismissing Negative Rate Speculation

After Bank of England (BoE) Governor Andrew Bailey downplayed speculation that negative interest rates could be introduced, the Pound has made solid gains during the last couple of sessions.

GBP exchange rates also continued to receive support from optimism over the speed of the UK government’s vaccination rollout, boosting hopes that lockdown might be eased next month.

BoE speculation and developments in Britain’s coronavirus situation are likely to keep influencing the Pound’s movement until Friday, when notable UK GDP data will be published, potentially driving some volatility as a -5.7% contraction is expected.

Euro News: Euro Lacks Drive Despite Decent Eurozone Data

The Euro struggled during today’s session following European Central Bank (ECB) President Christine Lagarde’s comments on the detrimental effects that strong EUR exchange rates are having on the Eurozone, increasing likelihood of more dovish monetary policy.

Today’s German wholesale prices and Eurozone industrial production figures beat forecasts earlier in the day, but they had little impact on the Euro’s movement.

With comments from Federal Reserve officials expected in the coming days, the Euro’s movement could be driven more by the US Dollar and shifts in market sentiment.

US Dollar News: USD Recovers Some Losses in Risk-Off Trade

The US Dollar edged higher on Wednesday as risk-off trade returned, increasing demand for the ‘Greenback’.

A slightly higher-than-expected rise in the US inflation rate also supported USD exchange rates, potentially signalling that the Federal Reserve’s monetary easing could be tightened sooner than anticipated.

USD investors will be focusing on Federal Reserve Chair Jerome Powell’s speech on Thursday as he may provide insight into when the Fed could taper its quantitative easing programme.

Canadian Dollar News: Strong Oil Prices Fail to Keep CAD Strong

The Canadian Dollar has been weakening against the Pound, and GBP/CAD has recovered last week’s losses already. This is despite prices of oil, Canada’s biggest export, trending around their best levels in over half a year.

The Canadian Dollar is weakening slightly due to Canada’s coronavirus jitters, as well as speculation that the Bank of Canada (BoC) could become more dovish.

No notable Canadian data is due through the rest of the week, which will leave CAD movement focused on oil prices and BoC speculation.

Australian Dollar News: ‘Aussie’ Resilience Slips but Outlook Remains Good

The Australian Dollar’s broad strength is pausing this week, so the Pound to Australian Dollar exchange rate is recovering.

Overall though, market optimism around coronavirus vaccines and economic recovery are keeping the AUD outlook strong.

Australian building permits data is due tomorrow, which is unlikely to be influential though, so the ‘Aussie’ will continue to be driven more by market sentiment.

Upcoming Data

Thursday, 14th December

00:30    Australian Building Permits

13:30    US Jobless Claims

13:30    US Import and Export Prices

17:30    Federal Reserve Chairman Powell Speech