As geopolitical tensions between the East and West rise, sanctions and souring relations could have lasting impacts on business globally.
- Signs of BoE dovishness may impact pound
- US dollar looks to recover ground on stronger consumer confidence
- New Zealand dollar vulnerable ahead of trade data
Pound under pressure ahead of BoE comments
Comments from Bank of England (BoE) Governor Mark Carney could put additional pressure on the pound this morning.
If Carney indicates a greater willingness to leave monetary policy on hold for the foreseeable future this could weigh heavily on GBP exchange rates.
Any fresh warning on the subject of Brexit could also see the pound weaken, given the continued lack of clarity over the UK’s future relationship with the EU.
On the other hand, if rumours of a potential extension to Article 50 gather steam this could offer GBP exchange rates a boost.
Stronger consumer confidence to boost US dollar?
USD exchange rates may find a rallying point this afternoon if February’s US consumer confidence index picks up as forecast.
Investors expect to see the index jump from 120.2 to 124.1 on the month, indicating an improvement in domestic consumer sentiment.
However, the latest commentary from Federal Reserve Chair Jerome Powell could set USD exchange rates on a fresh downtrend over the course of the afternoon.
If Powell suggests that the Fed is taking a more cautious outlook on interest rates this would weigh heavily on the appeal of the US dollar.
Slowing trade forecast to dent New Zealand dollar
The New Zealand dollar could return to a weaker footing tonight if January’s trade data disappoints.
Forecasts point towards the trade balance falling back into a state of deficit at the start of 2019, driven by a sharp slowdown in export volumes.
This would ignite fresh concerns over the outlook of the New Zealand economy, even in the face of a wider sense of market risk appetite.
Unless the trade data shakes off expectations and displays greater resilience the mood towards the New Zealand dollar looks set to sour.
Tuesday, 26th February 2019
10:00 GBP Bank of England Governor Mark Carney speaks at Parliament Committee
15:00 USD Consumer Confidence Index
21:45 NZD Trade Balance
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)