- Patrick Maflin
Pound Sterling (GBP)
The Pound saw relatively uninspired trade on Monday. The British currency was initially weighed down by concerns that the UK and EU would not be able to make an agreement on the Irish border, but Sterling shook off concerns.
Brexit developments will continue driving Pound exchange rate movement in the coming sessions. On top of the Irish border clashes, EU officials have told UK Prime Minister Theresa May that the UK Brexit divorce offer needs to be completed by the 4 December if the UK government wants to progress with trade talks.
US Dollar (USD)
The Pound to US Dollar exchange rate briefly advanced on Monday but generally trended just below the week’s opening levels. As the pair reached its best levels in eight weeks, investors indulged in profit-taking and the pair dropped.
Still, the US Dollar’s potential for further gains is limited as low 2018 Federal Reserve interest rate hike bets and concerns about US tax reform weigh on the currency.
While Monday’s US new home sales data was better than expected, the Dallas Fed manufacturing index only came in at 19.4, below the expected 24.
The Pound to Euro exchange rate edged higher on Monday but its gains were limited and the pair began to slip on Tuesday.
Despite news that German Chancellor Angela Merkel was attempting to form another ‘grand coalition’ between her CDU Party and the SDP Party, the Euro failed to exert itself. In the coming days, German political news and key inflation data from throughout the Eurozone could influence the shared currency.
Australian Dollar (AUD)
Besides occasional fluctuations, the Pound to Australian Dollar exchange rate has largely trended within a narrow range since markets opened this week. The pair remained just above the week’s opening levels on Tuesday.
The Australian Dollar has been holding its ground amid stronger demand for risk-correlated currencies and a lack of influential data from either the UK or Australia.
New Zealand Dollar (NZD)
The Pound to New Zealand Dollar exchange rate extended losses on Tuesday, approaching its worst levels in over a week.
Heightened demand for risky currencies boosted the New Zealand Dollar as investors bought the ‘Kiwi’ from its recent lows. Analysts speculate that the recent political-based weakness in the New Zealand Dollar has been overdone, so investors are buying the currency back during quieter trade.
Canadian Dollar (CAD)
The Pound to Canadian Dollar exchange rate jumped on Monday as investors reacted to news that oil prices were falling.
Prices of oil, Canada’s most lucrative commodity, fell 1% from their recent 2-year highs.
Jitters ahead of a Bank of Canada (BOC) press conference on Tuesday helped the Pound sustain gains against a weakened ‘Loonie’. However, CAD exchange rates could jump if the BOC press conference hints at a positive 2018 interest rate outlook.
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