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GBP refreshes 2020 high

business-articlesGBP refreshes 2020 high
  • Better-than-expected UK inflation data could send Sterling higher
  • Will Canadian inflation edge closer to the Bank of Canada’s target?
  • Aussie unemployment rate to rise from December’s nine/month low
 
Will upbeat UK inflation send the pound higher?

Sterling reversed its losses on Tuesday after new UK Chancellor Rishi Sunak said he would unveil the annual budget on 11 March as previously planned.
 
Added to this, upbeat UK labour market statistics revealed that the country’s employment rate jumped to a record high while UK pay hit its pre-crisis levels. 
Looking ahead to this morning, the pound could edge higher following the release of UK inflation data. 
 
If inflation rose in January it could provide the Bank of England (BoE) with a further sign that immediate policy easing is not needed. 
 
Canadian inflation could boost the ‘Loonie’

The Canadian dollar remained under pressure on Tuesday as oil prices fell below $57 a barrel. Prices slumped on decreased demand due to Covid-19 and a lack of action from OPEC and its allies to provide the market with further support. 
 
Reports on Tuesday showed the virus was having a wider impact on both companies and financial markets after HSBC and Apple reported damage due to the spread of Covid-19. 
 
Meanwhile, traders will be focused on this afternoon’s Canadian inflation rate which could provide some much-needed support. If inflation moves closer to the Bank of Canada’s (BoC) target, the ‘Loonie’ could edge higher. 
 
High Australian unemployment to dampen RBA outlook

Tuesday saw the Australian dollar slump following the release of dovish Reserve Bank of Australia (RBA) meeting minutes. 
The ‘Aussie’ suffered after policymakers discussed easing monetary policy during the first central bank meeting of 2020. 
 
Covid-19 fears also weighed on AUD, and as the bank’s minutes were two weeks old, policymakers did not discuss the recent escalation and spread of the virus which has dampened risk appetite
 
Looking ahead, the Australian dollar could suffer further losses following the release of highly-anticipated labour market statistics if unemployment rises.
 
Upcoming Data

Wednesday 19th February
09:30​GBP Inflation Rate (January)
13:30​CAD Inflation Rate (January)

Thursday 20th February
12:30​AUD Unemployment Rate (January)
 
 
Philip McHugh

Philip McHugh

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)

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