The Australian dollar trended lower through the majority of last week, with the risk-sensitive currency struggling to attract support as a gloomy market mood prevailed through most of the session.
Sterling is stable as we enter the new week, with GBP/EUR steady at €1.1609, GBP/USD buoyed at $1.2800, and GBP/AUD firming to AU$1.8669. GBP/CAD and GBP/NZD are holding steady at C$1.6929 and NZ$2.0164 respectively.
Looking ahead, UK politics may take a back seat the start of this week as GBP investors focus on the release of the UK’s latest GDP figures.
What’s been happening?
The pound was left rangebound on Friday as election speculation dragged on sentiment.
The latest developments saw SNP leader Nicola Sturgeon extend an olive branch to Labour, telling supporters at the party’s campaign launch that she would be willing to work with Jeremy Corbyn in order to block a Conservative government.
EUR exchange rates drifted lower at the end of last week in spite of some upbeat German trade figures.
While traders welcomed a surprising strong pick-up in exports in September, expectations that Germany will still slide into a recession in the third quarter left the euro weaker.
Meanwhile, the US dollar was buoyed by safe-haven demand on Friday as Donald Trump cast fresh doubts on a US-China trade deal.
The US President said that he has yet to decide whether to agree to Beijing’s request to begin rolling back tariffs between the two countries.
What’s coming up?
There will be plenty of economic data to distract GBP investors from politics at the start of this week, the highlight of which will be the UK’s latest GDP estimate.
The pound looks poised to rally following its release this morning, with a healthy rebound in growth in the third quarter meaning the UK will avoid slipping into a recession this year.
For EUR investors the focus will be on Germany’s own GDP figures, which are widely expected to show the Eurozone’s largest economy fell into a technical recession in the third quarter.
Finally, the US dollar may accelerate this week on the back of the latest US CPI release, with a rise in core inflation alleviating pressure on the Federal Reserve to continue cutting interest rates.
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)