GBP exchange rates extended their multi-month highs as the polls continued to point towards a Conservative victory.
- Pound remains under pressure thanks to BoE’s dovish message
- Euro fails to benefit from German export rebound
- New Zealand dollar stumbles thanks to growing global trade anxiety
Demand for the pound remained generally muted ahead of the weekend thanks to the increased odds of a 2020 Bank of England (BoE) interest rate cut.
However, GBP exchange rates could find a strong rallying point this morning if third quarter gross domestic product picks up as forecast.
A stronger quarterly growth rate would eliminate the risk of a technical recession, undoing the negative impact of the second quarter’s -0.2% decline.
Weak Italian industrial performance set to dent euro
An unexpectedly solid rebound in German export volumes failed to support the euro on Friday as recession concerns remained.
The euro could come under pressure today if September’s Italian industrial production figures prove underwhelming.
Evidence of a continued slowdown in the Italian manufacturing sector would cast a fresh shadow over the Eurozone’s economic outlook, limiting the potential for EUR exchange rate gains.
Trade uncertainty weighs on New Zealand dollar
Growing uncertainty over the odds of the US and China agreeing a preliminary trade deal left the New Zealand dollar under pressure.
As markets expect to see the Reserve Bank of New Zealand (RBNZ) cut interest rates on Wednesday support for the New Zealand Dollar may remain muted this week.
Unless investors see significant progress towards a tangible US-China trade agreement the potential for an NZD exchange rate rally seems limited.
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)