On 13 June, the UK government revealed legislation that would allow it to scrap parts of the Northern Ireland protocol.
- Pound under pressure after disappointing UK inflation
- CAD exchange rates weaken ahead of payrolls report
- Mixed US data to drive dollar volatility
Pound could dip on UK retail sales data
The pound came under renewed pressure yesterday thanks to an unexpectedly sharp easing of the UK consumer price index, which slowed from 2.7% to 2.4% in September.
Further losses could be in store for GBP exchange rates today if September’s UK retail sales data shows signs of weakness.
Any decline in consumer spending could undermine confidence in the outlook of the wider economy, as consumers are largely responsible for driving domestic growth.
A softer showing may encourage further Pound selling this morning, especially if worries over the threat of a no-deal Brexit continue to mount.
Can stronger payrolls report shore up Canadian dollar?
Disappointing Canadian data has limited the potential of CAD exchange rates this week, with the chances of an imminent Bank of Canada (BOC) interest rate hike diminishing.
As a result, CAD exchange rates are looking for support on the back of this afternoon’s ADP payrolls report.
If the report points towards a tightening domestic labour market the mood towards the Canadian dollar could pick up.
However, as long as the oil market remains bearish CAD exchange rates may struggle to overcome a wider sense of risk aversion.
Increased economic momentum to bolster US dollar
Forecasts point towards a modest uptick in this afternoon’s US leading index, potentially offering the US dollar another boost.
Evidence of increased momentum within the US economy may give investors fresh incentive to pile into the US dollar today.
Even so, as October’s Philadelphia Fed business outlook index is expected to weaken on the month this may limit the potential of USD exchange rates.
As long as market risk appetite remains muted, though, any US dollar weakness is likely to prove fleeting.
Thursday, 18th October 2018
09:30 GBP Retail Sales
13:30 CAD ADP Payrolls Report
13:30 USD Philadelphia Fed Business Outlook
13:30 USD Leading 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)