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Oil Market Rally Fails to Boost Canadian Dollar

Pound News: Weakening Household Finances Weigh on Sterling

Demand for the Pound (GBP) deteriorated once again on Monday, prompted by the disappointing nature of the IHS Markit Household Finance Index.

With living costs found to have risen at their fastest pace in twelve months in February the report did not paint an overly encouraging picture of the domestic outlook.

If the CBI industrial trends data for February also shows a weakening on the month this could leave GBP exchange rates on a weaker footing over the course of the day.


Euro News: Eurozone Construction Sector Falters

December’s Eurozone construction output data failed to impress, showing an increase of only 0.1% on the month as the sector lost some of its earlier momentum.

Developments at the latest Eurogroup meeting also gave the Euro (EUR) cause for jitters, as the disbursement of fresh Greek bailout funds was delayed.

As forecasts point towards a dip in both the Eurozone and German ZEW economic sentiment surveys this could keep the Euro under some degree of pressure this morning.


US Dollar News: Trade War Concerns Drive USD Demand

Despite US markets being closed to mark President’s Day the US Dollar (USD) was able to regain further ground at the start of the week.

A resurgence in fears over a prospective trade war between the US and China benefitted the safe-haven USD, even as the volatility of global stock markets eased somewhat.

With US data still thin on the ground today, however, USD exchange rates may struggle to hold onto their gains for long.


Canadian Dollar News: CAD Exchange Rates Muted Despite Oil Price Rally

Although oil markets staged a solid recovery on Monday, with Brent crude breaking back above the US$65 per barrel mark, this failed to shore up the commodity-correlated Canadian Dollar (CAD).

Confidence in the Canadian Dollar remained largely weak as a result of the softness of recent domestic data, with the prospect of further Bank of Canada (BOC) hawkishness diminished.

Should this afternoon’s wholesale trade sales data also show a weakening on the month then CAD exchange rates look set to extend their losses.


Australian Dollar News: Dovish RBA Outlook Limits ‘Aussie’ Appeal

With the Reserve Bank of Australia (RBA) looking set to maintain its current neutral policy bias for some time to come the appeal of the Australian Dollar (AUD) remained limited.

In the absence of any positive domestic data, still feeling the impact of last week’s underwhelming labour market report, there was little to support AUD exchange rates on Monday.

A stronger showing from tonight’s Westpac leading index may encourage the Australian Dollar to rally, though.


Upcoming Data

Tuesday, 20 February

10:00     German ZEW Economic Sentiment Survey

10:00     Eurozone ZEW Economic Sentiment Survey

11:00     UK CBI Industrial Trends Orders

13:30     Canadian Wholesale Trade Sales

23:30     Australian Westpac Leading Index

Joe Mayhew

Currency Dealer

01442 892 069


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