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17th February 2017 - Exchange Rates News written by TorFX for Exchange-Rate.net
Amid a lack of fresh news, Pound movement was largely reliant on investors' reactions to the week's UK inflation and wage growth reports on Thursday. British wage growth was unexpectedly slow towards the end of 2016, which left traders worried that Britain's retail sector would take a hit in 2017 as consumers rein in spending.
The Pound extended its losses on Friday as January's UK retail sales came in well below expectations, indicating that consumer sector activity is already dropping. Yearly retail sales slowed to 1.5% and monthly sales contracted by -0.3%.
The Pound to US Dollar exchange rate fluctuated near the week's opening levels throughout Thursday, unable to surpass the key resistance level of 1.25.
Thursday's US data showing that Philadelphia manufacturing activity had improved at its fastest rate for 33 years failed to improve the US Dollar considerably, as US investors were largely focused on this week's busy stock market activity amid hopes of fiscal policy changes from US President Trump.
Once Trump's tax and infrastructure plans are put into place, the US Dollar could spring into action and - if they impress - could cause GBP/USD to plunge.
The Pound to Euro exchange rate lost around half a cent on Thursday as the Euro was able to recover against a limp Pound. This saw GBP/EUR briefly hit its worst levels in over a week.
The European Central Bank's (ECB) meeting minutes from January were published and, as expected, showed little desire to return to tighter monetary policy in the foreseeable future. The bank took a cautious and patient stance and once again stated that inflationary pressures were subdued.
However, the shared currency was able to benefit from news that the controversial EU-Canada trade deal, CETA, had been passed through European Parliament.
The Pound to Australian Dollar exchange rate was able to advance on Thursday as demand for risk-correlated currencies slipped. The day's Australian employment results were unable to give the 'Aussie' significant support as they indicated that while the labour market appeared healthy at first gland, full-time employment had plummeted by -44.8k in just a month.
However, GBP/AUD advances were slight and the pair remained below the week's opening levels.
The Pound to New Zealand Dollar exchange rate has fluctuated this week amid disappointing New Zealand data. However, the Pound still struggled to hold its ground due to the week's poor UK data.
Friday's Asian session saw the publication of New Zealand's Q4 retail sales results, which came in below expectations. The yearly retail sales result fell from 5.1% to 4.2%, while the quarterly figure came in at 0.8% rather than the projected 1%. Not only that, but the Q3 figure was revised lower from 0.9% to 0.8%.
The Pound to Canadian Dollar exchange rate fluctuated within a tight range during Thursday's session as the Pound remained limp on the week's UK data while the Canadian Dollar struggled to benefit due to a slip in oil prices throughout the day.
The oil-correlated Canadian Dollar has struggled this week as analysts remain highly uncertain about the long-term future of oil prices, especially with the US seemingly ramping up production.
However, speculation that OPEC member states could introduce even deeper oil production cuts in the coming year in order to tackle the oil glut could support the Canadian Dollar if it turns out to be true.
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