As geopolitical tensions between the East and West rise, sanctions and souring relations could have lasting impacts on business globally.
- Pound on weaker footing ahead of BoE commentary
- US dollar vulnerable to deteriorating business confidence
- Weak consumer confidence to soften Australian dollar
Cautious BoE comments may drive fresh pound losses
The pound could struggle to shake off the negative impact of yesterday’s underwhelming UK gross domestic product data in the near term.
With the economy continuing to lose momentum comments from Bank of England (BoE) Governor Mark Carney are unlikely to prove positive this afternoon.
Another dovish performance from Carney could add to the negative mood of GBP exchange rates, even though the BoE is already expected to remain on hold for the foreseeable future.
Any optimistic comments, on the other hand, may give the pound a temporary rallying point against its rivals.
Weakening business optimism to weigh on US dollar
Confidence in the underlying health of the US economy could take another dent this morning if the NFIB small business optimism index weakens on the month.
This would leave the US dollar exposed to fresh selling pressure, with another decline in business optimism boding ill for the economic outlook.
Lingering trade tensions with China and falling US export volumes could prompt business sentiment to weaken further at the start of 2019.
Signs of greater resilience, however, could keep USD exchange rates on a stronger footing today.
Australian dollar vulnerable ahead of consumer confidence index
Tonight’s Westpac consumer confidence index is not expected to offer any particular support to the Australian dollar.
As forecasts point towards sentiment continuing to sour in February this is likely to drive fresh losses for AUD exchange rates.
With the Australian economy already showing signs of weakness a continued deterioration in consumer confidence would pave the way for a further decline.
If the index surprises to the upside, though, this may boost the appeal of the Australian dollar overnight.
Tuesday, 12th February 2019
11:00 USD NFIB Small Business Optimism
13:00 GBP Bank of England Governor Carney Speech
23:30 AUD Westpac Consumer Confidence
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)