As geopolitical tensions between the East and West rise, sanctions and souring relations could have lasting impacts on business globally.
- Conservative leadership contest dominates pound outlook
- Widening goods trade deficit could dent US dollar
- New Zealand dollar looks for boost on consumer confidence index
Political anxiety keeps pound under pressure
Political uncertainty looks set to dominate the mood towards the pound for another day as markets continue to weigh up the odds of a hard-line Brexiteer taking over as prime minister.
As long as the risk of a no-deal Brexit appears to increase the strength of GBP exchange rates could remain limited, with political anxiety having already dragged on economic growth.
Without an increase in support for a more moderate Conservative Party leadership candidate the Pound is likely to continue its down trend.
However, as forecasts point towards an uptick in tomorrow’s GfK consumer confidence index the Pound could find a temporary rallying point.
US dollar vulnerable to signs of weakening trade position
As the Richmond Fed manufacturing index remained within positive territory this prevented the US dollar from trending lower yesterday.
Even so, USD exchange rates could see fresh pressure this afternoon if April’s US advance goods trade balance figure disappoints.
Forecasts point towards the trade deficit widening from -71.4 billion to -72.3 billion on the month, highlighting a persistent weakness in the US trade picture.
With China looking set to deliver further retaliation to US tariffs the risk of a continued deterioration in trade conditions could lead the US dollar lower across the board.
Rising consumer confidence to boost New Zealand dollar
Tonight’s ANZ consumer confidence index could offer a boost to the New Zealand dollar, with investors anticipation a modest improvement on the month.
Signs of resilience among New Zealand consumers would give markets some cause for confidence in the outlook of the wider economy, with higher confidence likely to encourage higher spending.
A strong showing here could also help to limit the risk of the Reserve Bank of New Zealand (RBNZ) cutting interest rates in the months ahead.
If the index deteriorates on the month, though, NZD exchange rates may extend their downtrend further.
Thursday, 30th May 2019
13:30 USD Advance Goods Trade Balance
23:00 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)