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Pound jumps as business optimism soars

currency-newsPound jumps as business optimism soars
The pound put on an impressive performance yesterday, with the currency advancing against the majors thanks to a surprising improvement in business optimism.

Sterling has given up some of those gains this morning however, particularly against the Australian dollar.

GBP/EUR is trading in the region of €1.1842, GBP/USD is fluctuating around $1.3124, and GBP/CAD is holding at C$1.7276. GBP/AUD and GBP/NZD have fallen to AU$1.9110 and NZ$1.9905 respectively.

What’s been happening?

An unexpected surge in the first quarter CBI business optimism index helped GBP exchange rates gain across the board yesterday.
 
The index rebounded from -44 to 23, reflecting a significant recovery in business sentiment and catching investors off guard.
 
Meanwhile, the Trump administration’s latest threats to impose additional tariffs on EU exports saw the euro stumble.
 
With the Eurozone economy already showing the negative impact of weaker global trade the prospect of additional disruption left the single currency on the back foot.
 
The Australian dollar jumped overnight as investors reacted to the latest Australian employment figures. The ‘Aussie’ economy added more positions than forecast, resulting in a surprise decline in the national unemployment rate.

What’s coming up?

The pound may struggle to hold onto yesterday’s gains thanks to a lack of fresh domestic data.
 
Lingering worries over the risk of a hard Brexit scenario could also put pressure on GBP exchange rates as markets watch the latest comments from senior Conservatives.

This afternoon’s European Central Bank (ECB) interest rate decision is the main event to watch out for.

The central bank isn’t expected to make any policy adjustments but the tone of their accompanying statement will give investors an indication of their plans for the year ahead.

Any cautious commentary would be euro-negative.
 
Philip McHugh

Philip McHugh

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)

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