As geopolitical tensions between the East and West rise, sanctions and souring relations could have lasting impacts on business globally.
- Pound looks to rally on stronger business confidence
- Rising goods orders may extend US dollar gains
- New Zealand dollar slides after weak Australian inflation
Improved business optimism set to shore up pound
Demand for the pound could pick up further this morning on the back of April’s CBI industrial trends orders and business optimism indexes.
Forecasts point towards an uptick in both measures on the month, indicating that the negative impact of Brexit-based anxiety eased in spite of a continued sense of uncertainty.
Although business optimism is not expected to return to positive territory this month any solid improvement on March’s reading of -23 should give GBP exchange rates a boost.
However, any fresh signs of weakness within the UK economy could see the pound extending its recent downtrend further.
Durable goods orders rebound to boost US dollar demand
USD exchange rates could make further gains this afternoon if durable goods orders show the expected rebound on the month.
Investors anticipate a solid increase in orders in March, reversing much of the previous month’s -1.6% contraction.
Evidence of increased consumer confidence within the US economy would offer the US dollar fresh cause for confidence, improving the odds of stronger economic performance in the months ahead.
If orders fail to recover on the month, though, this may diminish some of the bullishness of USD exchange rates.
New Zealand dollar under pressure ahead of trade data
After the Australian inflation rate fell short of forecast yesterday the New Zealand dollar has come under increased pressure, following its antipodean cousin lower.
With markets already pricing in high odds of a Reserve Bank of New Zealand (RBNZ) interest rate cut NZD exchange rates remain vulnerable to any signs of increased central bank dovishness.
Even so, tonight’s New Zealand trade data could offer the New Zealand dollar a rallying point if the surplus widens as anticipated.
As long as export volumes show a solid increase on the month NZD exchange rates are likely to return to a positive footing overnight.
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)