January’s sharp monthly rebound in UK retail sales was not enough to keep the pound from coming under fresh pressure yesterday.
- Unexpectedly split BoE vote fuels pound losses
- Falling jobless claims shore up US dollar
- Oil price uptick benefits Canadian dollar
A surprise split in the Bank of England’s (BoE) interest rate decision saw the pound fall sharply out of favour yesterday.
As two policymakers unexpectedly voted in favour of cutting interest rates back to 0.5% the odds of a 2020 rate cut jumped, leaving investors with little incentive to favour the pound.
GBP exchange rates are likely to remain under pressure today as markets continue to price in the higher likelihood of a future interest rate cut.
With political jitters only set to mount as the UK braces for the December general election, the pound may struggle to find any particular support in the near term.
Rising consumer confidence to offer US dollar support
Lower initial and continuing jobless claims figures offered support to the US dollar yesterday and the currency could find a fresh rallying point on the back of November’s University of Michigan consumer sentiment index.
A modest uptick in consumer confidence could encourage hopes for a more resilient fourth quarter gross domestic product reading, as higher levels of spending would fuel economic activity.
If sentiment fails to pick up in the face of ongoing trade tensions, however, this could see the US dollar fall out of favour.
Canadian dollar vulnerable to underwhelming labour market performance
Rising oil prices offered the Canadian dollar a fresh boost on Thursday, but the mood towards the ‘Loonie’ could sour this afternoon if October’s raft of labour market data fails to impress.
While the unemployment rate is expected to remain steady at 5.5% CAD exchange rates could still come under pressure if the month’s employment change figure disappoints.
Any softening of average hourly earnings would also weigh heavily on demand for the Canadian dollar.
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)