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Anticipation weighs on pound ahead of BoE announcement
Canadian dollar looks for support from wholesale trade sales data
Improved consumer confidence to shore up New Zealand dollar
Pound under pressure ahead of BoE rate decision
Fresh volatility is likely in store for the pound today in the wake of the Bank of England’s (BoE) December policy announcement.
Although no change in interest rates is forecast at this stage, especially after November’s weaker inflation rate, GBP exchange rates still look vulnerable to downside pressure.
If policymakers adopt a more cautious outlook in the meeting minutes this could weigh heavily on the pound, with the odds of a 2019 rate hike diminishing further.
Even if there are signs of a greater willingness to raise interest rates, though, the persistent uncertainty surrounding Brexit still looks set to keep the BoE on hold for some time to come.
Canadian dollar to benefit from rebound in wholesale trade sales
As forecasts point towards a solid rebound in Canadian wholesale trade sales on the month in October CAD exchange rates could return to a positive footing today.
Evidence of resilience within the domestic economy would diminish the negative impact of yesterday’s disappointing inflation data.
However, another month of contracting sales may drive the Canadian Dollar to fresh losses this afternoon.
Weakness in the oil market could also keep CAD exchange rates under pressure in the near term if worries over global oversupply persist.
Rising consumer confidence to boost New Zealand dollar
An uptick in tonight’s ANZ consumer confidence index may offer the New Zealand dollar a boost if signs continue to point towards improving domestic sentiment.
Increased levels of consumer confidence would bode well for the outlook of the wider economy, with more positive sentiment likely leading to greater levels of spending and growth.
On the other hand, any decline in confidence would leave NZD exchange rates exposed to fresh selling pressure.
Market risk aversion could also limit the appeal of the New Zealand dollar today if worries over the growth of the global economy continue to mount.
Thursday, 20th December 2018
12:00 GBP Bank of England Rate Decision
13:30 CAD Wholesale Trade Sales
13:30 USD Philadelphia Fed Business Outlook
21:00 NZD ANZ Consumer Confidence Index
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)