As geopolitical tensions between the East and West rise, sanctions and souring relations could have lasting impacts on business globally.
- Pound could benefit from optimistic BoE meeting minutes
- Weaker wholesale trade sales could dent Canadian dollar
- US dollar looks for support from Philadelphia Fed business outlook index
Signs of BoE optimism could shore up pound
The mood towards the pound could improve today if the Bank of England’s (BoE) March meeting minutes show signs of optimism.
If policymakers maintain a positive outlook on the economy, in spite of Brexit-based uncertainty, GBP exchange rates could rally.
However, as the BoE’s hands remain tied by Brexit developments the odds of interest rates rising in the near future are unlikely to improve.
Developments surrounding Theresa May’s request for a three-month extension of the Brexit deadline may also limit the pound’s potential for gains.
Canadian dollar vulnerable ahead of wholesale trade sales
After US oil stockpiles showed an unexpectedly sharp decline on the week the Canadian dollar was able to recover some ground.
Even so, CAD exchange rates remain vulnerable ahead of this afternoon’s wholesale trade sales data.
Unless sales show a solid uptick on the month the data could exacerbate worries over the outlook of the Canadian economy, leaving the Canadian dollar vulnerable to further selling pressure.
On the other hand, an acceleration in wholesale trade sales may offer CAD exchange rates a fresh rallying point.
Business outlook index could bolster US dollar demand
Confidence in the health of the US economy may improve this afternoon on the back of March’s Philadelphia Fed business outlook index.
Forecasts point towards the index strengthening from -4.1 to 5.0, with investors likely to take encouragement from a return to positive territory.
If business sentiment shows signs of improving, helping to ease worries over the economic outlook, the US dollar could benefit.
Another disappointing reading, however, would leave USD exchange rates exposed to a fresh bout of selling pressure.
Thursday, 21st March 2019
09:30 GBP Retail Sales
12:00 GBP Bank of England Rate Decision
12:30 CAD Wholesale Trade Sales
12:30 USD Philadelphia Fed Business Outlook
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)