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GBP to EUR, USD Volatility Prompted by Possible Cabinet Split

Pound News: Cabinet Rift Further Frustrates Brexit Process

The Pound (GBP) came under renewed pressure on Wednesday following reports that prominent Brexitiers were angered by Theresa May’s perceived shift towards a ‘soft’ Brexit.

This further dented Sterling sentiment on fears that a cabinet revolt would complicate the PM’s attempts to salvage an exit agreement for the UK.

Brexit worries are likely to continue weighing on the Pound today as well as investors fear that a deal may not be agreed upon before an EU summit next week, likely leading to further delays to trade talks.

Euro News: GBP/EUR Exchange Rate Recoups Losses on Poor Eurozone Retail Figures

The Pound to Euro (GBP/EUR) exchange rate continued trending lower on Wednesday as Brexit jitters weighed heavily on the pairing.

Meanwhile, the single currency was lifted yesterday by some unexpected growth in German factory orders as October’s figures grew by 0.5% against expectations orders would contract -0.3%.

The Euro’s gains may be extended further again today by the release of the latest Eurozone GDP figures as economists forecast that the latest estimate will confirm the bloc’s robust growth in the third quarter.

US Dollar News: USD Strengthened by Employment Figures

The Pound to US Dollar (GBP/USD) exchange rate failed to rally yesterday as the ‘Greenback’ strengthened on the back of some solid employment figures.

Payroll operator ADP revealed that America’s private sector created 190,000 jobs in November, slightly up from forecasts and providing further evidence of the strong US labour market.

Investors will be hopeful that this translates into strong non-farm payroll figures on Friday, with another impressive performance likely to strengthen the US Dollar.

Canadian Dollar News: CAD Tumbles after BoC Announcement

After initially slipping yesterday, the Pound mounted a recovery against the Canadian Dollar (CAD) in the afternoon following the Bank of Canada’s (BoC) latest rate decision.

While the bank’s decision to leave rates on hold this month had been widely forecast ahead of time, the ‘Loonie’ suffered from a more cautious outlook from Governor Stephen Poloz.

The Canadian Dollar may find itself trending even lower this afternoon with the release of the latest Ivey PMI, with analysts forecasting that business confidence will have dipped in November.

Australian Dollar News: AUD Gains Dented by Disappointing GDP Figures

The Pound to Australian Dollar (GBP/AUD) exchange rate also took a knock on Wednesday as the cabinet split threated to further undermine attempts to salvage a Brexit deal.

However, the ‘Aussie’ found its gains tempered somewhat by Australia’s latest GDP figures as data showed that economic growth slowed more than expected in the third quarter due to a decline in household consumption.

The Australian Dollar may also find its chances to advance later tonight hindered as analysts predict that figures will show that mortgage approvals contracted again in October.

New Zealand Dollar News: GBP/NZD Tumbles on Brexit Uncertainty

Sterling struck a new weekly low against the New Zealand Dollar (NZD) yesterday as markets came increasingly nervous about possible rebellion at the top of the UK government.

Further strengthening the ‘Kiwi’ was the dip in the Australian Dollar, with the overflow from the Kiwi/Aussie cross trickling into GBP/NZD.

The New Zealand Dollar may be able to build on these gains later tonight as well, with economists forecasting that data will show an uptick in manufacturing sales in the third quarter.

 

Upcoming Data

 

Thursday, 07 December, 2017

08:30              UK House Price Index (Nov)

10:00              EU Q3 GDP (second estimate)

13:30              US Initial Jobless Claims

15:00              CA Ivey PMI (Nov)

22:45              NZ Manufacturing Sales (Q3)

James Baxter

Currency Dealer

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