Pound News: Sterling Claws Back Losses despite Tory Lead Narrowing
Sterling recovered on Wednesday afternoon after suffering losses earlier in the day as further UK election opinion polls showed the Conservatives’ lead over Labour continued to narrow. Added to this, there was a surge in under-35s registering to vote ahead of the midnight deadline, which weighed on GBP as young people are less likely to vote for the Tories.
Last night, YouGov released its seat-by-seat predictions for the 12th December election. The results likely provided a slight upswing of support for Sterling as the poll predicted a big win for Boris Johnson. The Conservatives are expected to gain a majority of 68 while the Labour Party is predicted to fall back to 211 seats.
The Pound could edge up overnight following the release of GfK’s consumer confidence index. If confidence rises higher than expected in November despite Brexit and election woes, Sterling sentiment is likely to rise.
Euro News: EUR Falls as Italian Consumer Confidence Remains Gloomy
The Euro was left under pressure on Wednesday despite data showing the bloc’s second largest economy had a boost to consumer confidence. Just a year ago, French confidence slumped thanks to ‘yellow vest’ protests, however confidence hit its highest level since the start of Emmanuel Macron’s presidency.
However, this did little to buoy the single currency as there is a stark contrast between France and Italy in terms of mood. The mood in Italy remained gloomy as consumer confidence plummeted to its lowest level in two years.
Later today could see the Euro extend losses following the release of Germany’s flash inflation data. If inflation slumps further than expected in November, EUR exchange rates could slide.
US Dollar News: Trump’s Upbeat Comments Boost USD
The US Dollar edged higher on Wednesday as further talk of securing a US-China trade deal provided the currency with relief. President Donald Trump’s upbeat tone on trade discussions helped buoy USD as he announced Washington and Beijing were in the ‘final throes’ of work on a deal.
Meanwhile, further data showed US economic growth picked up in Q3 and signs the downturn in business investment could be stabilising. The improvement in this week’s economic data saw the risk of a recession in the near term shrink, providing USD with support.
Looking ahead, the ‘Greenback’ could move if there are further developments in US-China trade negotiations. If reports reveal the US and China have reached a ‘phase one’ trade deal, the Dollar is likely to rise.
Canadian Dollar News: ‘Loonie’ Flat as Oil Prices Steady
The Canadian Dollar remained flat against a handful of currencies, although the currency fell against the Pound. Oil prices steadied above $64 a barrel as US-China trade optimism offset concerns from a report showing an unexpected rise in US crude inventories.
Looking this afternoon, the Canadian Dollar could edge up following the release of September’s annual weekly earnings data. If Canadian wage growth continues to rise, the ‘Loonie’ could be provided with support.
Australian Dollar News: Investors Fear Further RBA Easing
The Australian Dollar remained under pressure on Wednesday despite an upswing in risk-appetite thanks to US President Trump’s upbeat comments on US-China trade.
Meanwhile, investors bet on further easing from the Reserve Bank of Australia (RBA). Westpac’s Chief Economist, Bill Evans said he predicted two interest rate cuts and quantitative easing to be introduced, which weighed on AUD.
Looking ahead, further reports on the progress of US-China negotiations is likely to cause movement of Australian Dollar exchange rates. The ‘Aussie’ is likely to jump if there are further upbeat comments from either Washington or Beijing that spark a rise in risk appetite.
Thursday 28th November
10:00 EUR Business Confidence
13:00 EUR German Flash Inflation Rate
13:30 CAD Average Weekly Earnings