Euro sees boost after CETA agreed

The British pound experienced temporary gains on the back of positive economic data, including GDP and retail sales, but lost value soon after. Elsewhere, the euro saw a boost after the Canadian trade deal was agreed.
 
Meanwhile, the US dollar has seen a softening in value this week, while the Canadian dollar has seen oil price affect exchange rates.
 
Sterling achieved temporary gains
 
This week saw temporary gains achieved for the British pound after positive GDP and retail sales data was released. The figures gave some support to the exchange rates with the euro and US dollar.
 
The Office for National Statistics (ONS) said that GDP increased by 0.5% in quarter three, while the Confederation for British Industry (CBI) said retail sales surged to +21, far higher than the forecast -2.
 
Sterling could not sustain these gains, however, and is now predicted to fall in value against the euro by the end of the day.
 
Analysts pointed out that the pound’s struggle to maintain its good performance followed car maker Nissan saying it was intending to expand its Sunderland plant after the government had given it “support and assurances” after the Brexit vote.
 
Nissan’s decision has been questioned, with some experts suggesting that the government could pay the company’s EU-imposed tariffs when the UK officially leaves the European Union.
 
The euro regains the ground it lost against Sterling
 
The euro saw the pound gain value against it after the GDP, retail sales and Nissan announcements were made. However, these gains did not last and the euro has regained the ground it lost.
 
Problems with signing the Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU resulted in some concern over the euro. A dissenting Belgian region opposed the deal and therefore refused to sign it. However, they agreed to go ahead with CETA this week, which allayed fears and gave the euro some encouragement.
 
After the deal was agreed, the euro was able to make gains on the US dollar. However, Eurozone M3 money supply growth slowed slightly to 5% in September, after 5.1% was reported in August. It had been forecast that September’s aggregate would remain at 5.1% so the drop caused the euro to lose some value.
 
Softened confidence in the US dollar
 
Confidence in the US dollar has softened this week, according to analysts. September’s US durable goods orders declined by 0.1% from the previous month, which was lower than the 0.1% growth that had been forecast.
 
US GDP data is to be released later today. If the figures are positive, it will lend more authority to the speculation that the Federal Reserve will raise interest rates. If disappointing data is released, however, there might be a drop in confidence that rates will rise.
 
According to analysts, the greenback is expected to experience some volatility in the coming days.
 
The Canadian dollar loses ground against the euro
 
Falling oil prices have caused problems for the Canadian dollar, resulting in the euro making large gains against it this week.
 
However, Reuters reported that oil prices rose on Thursday, which then saw the CAD rise against the USD. The agreed CETA also improved the long-term forecast for the Canadian dollar.