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Pound (GBP) Leaps as UK Government Offers €50bn Brexit Bill Payment

Pound News: Investors Welcome UK Divorce Bill Offer

The Pound (GBP) soared against the other majors on Wednesday, building on the gains seen late on Tuesday as investors welcomed reports that the UK government would offer a €50bn Brexit payment to the EU.

Investors are hopeful that the sizeable offer will help get Brexit negotiations moving again after they stalled in recent weeks.

However, Sterling could be forced to relinquish these gains over the coming days if the two sides remain at an impasse over the issues of the Irish Border and EU citizens’ rights as it could still lead to trade talks being delayed.

Euro News: GBP/EUR Exchange Rate Surges as German Inflation Fails to Impress

The Pound to Euro (GBP/EUR) exchange rate climbed to a new two-week high on Wednesday on hopes that the UK’s divorce bill offer will help to reinvigorate Brexit negotiations.

At the same time German CPI figures failed to lift the single currency despite showing that inflation surged more than expected in November as the jump was attributed to volatile energy and food prices.

The Euro may mount a recovery later this morning, however, if Germany’s employment data impresses investors.

 

US Dollar News: GBP/USD Exchange Rate Slips from Two-Month High as US GDP Beats Expectations

The Pound to US Dollar (GBP/USD) exchange rate found itself retreating from a two-month high yesterday as markets welcomed the latest US GDP figures.

The latest third quarter growth estimate suggested that the US economy expanded by 3.3% over the summer, beating the previous estimate of 3.0% and reaching its fast rate of expansion since 2014.

However, the ‘Greenback’ may struggle to hold onto gains this afternoon as economists forecast that US consumer spending will have dropped sharply in October.

 

Canadian Dollar News: GBP/CAD Strengthens on Brexit Hopes

The Pound raced higher versus the Canadian Dollar on Wednesday, with the pairing appreciating by over a cent on hopes that the UK government’s €50bn incentive will help get Brexit talks moving.

Meanwhile, the ‘Loonie’ struggled to stem its losses yesterday due to both a fall in crude prices and the strengthening of the US Dollar.

With OPEC set to meet later today, the Canadian Dollar could be in for some significant volatility on Thursday, especially if oil prices fall even further in reaction to the cartel’s decision.

 

Australian Dollar News: AUD Weakened by Subdued Commodity Markets

The Pound to Australian Dollar (GBP/AUD) exchange rate rocketed to a new 16-month high yesterday in the wake of reports the UK government would be willing to significantly raise the amount of money it would pay to cover its financial obligations in the EU.

At the same time, the ‘Aussie was unable to offer much resistance against Sterling’s advance as it was suppressed by a bolstered US Dollar and subdued commodity markets.

The Australian Dollar may be able to recoup some ground later tonight however as economists forecast that the domestic Manufacturing PMI will have risen this month.

 

New Zealand Dollar News: NZD Unaffected by RBNZ Stability Report

Sterling climbed by over a cent against the New Zealand Dollar on Wednesday, with investors optimistic about the chances of Brexit trade talks beginning by the end of the year.

Meanwhile, the ‘Kiwi’ was largely unaffected by the Reserve Bank of New Zealand’s (RBNZ) half-yearly Financial Stability Report, with it largely focused on the bank’s plans to ease its home loan restrictions.

The New Zealand Dollar may continue to tumble later this evening as analysts predict that the domestic terms of trade index will have slipped in the third quarter.

 

Upcoming Data

 

Thursday, 30 November, 2017

 

07:00             UK Nationwide House Price Index (Nov)

08:55             DE Unemployment Rate (NOV)

10:00             EU Inflation Rate (Nov)

10:00             EU Unemployment Rate (Nov)

13:30             US Personal Spending (OCT)

22:30             AU Manufacturing Index (Nov)

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