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9th February 2017 - Exchange Rates News written by TorFX for Exchange-Rate.net
The Pound generally trended flatly on Wednesday as investors remained optimistic thanks to Tuesday's hawkish comments from Bank of England (BoE) policymaker Kristin Forbes. However, the British currency was unable to hold its best levels due to Brexit jitters.
Sterling was also weighed down slightly by news that the BoE had slowed its UK pay rise outlook for 2017. According to BoE's report of around 700 British businesses, wage growth is predicted to slow from 2.7% to 2.2%.
On Thursday morning, the Pound advanced slightly due to ongoing BoE hopes.
The Pound to US Dollar exchange rate advanced on Wednesday and Thursday morning as the US Dollar weakened during the US session.
Investors looked to lock in profit from the 'Greenback's recent gains, making it easier for GBP/USD to advance. The US Dollar was also weakened slightly by increasing worries that the US and China would see some sort of trade war under the US Trump administration.
The Pound to Euro exchange rate edged higher on Wednesday. While the Pound's advance slowed due to Brexit jitters, it was able to register gains against the Euro due to resurfacing 'Grexit' worries.
While the Brexit vote and process has dominated European headlines in the last year, 'Grexit' - the possibility that Greece may leave the Eurozone - is back in the spotlight once more. Greece's economic crisis has taken headlines again this week as Eurozone leaders and the International Monetary Fund (IMF) increasingly disagree on how to proceed with Greek debt relief. There are also concerns that Greece will not agree to additional austerity in exchange for further funding.
On Thursday morning, the Euro was also weighed down by news that Germany's December trade data had failed to meet expectations.
The Pound to Australian Dollar exchange rate edged higher on Wednesday.
While the pair spent much of the day lower due to strong iron ore prices and Reserve Bank of Australia (RBA) optimism, GBP/AUD eventually advanced due to another Sterling rush in the evening.
Demand for the risk-correlated Australian Dollar slipped further on Thursday as investors headed into 'safe haven' investments.
The Pound to New Zealand Dollar exchange rate surged on Wednesday night and Thursday morning, as the Reserve Bank of New Zealand's (RBNZ) first monetary policy decision of the year disappointed 'Kiwi' traders.
While the bank left NZ interest rates frozen as predicted, the tone taken by RBNZ Governor Graeme Wheeler was generally dovish and indicated to markets that policy was likely to remain lighter for longer, rather than returning to a tightening bias in the foreseeable future. This weighed heavily on NZD demand and caused a drop in risk-sentiment.
The Pound to Canadian Dollar exchange rate held near its best weekly levels throughout Wednesday's session and advanced again on Thursday morning due to a drop in demand for risk-correlated currencies.
News that oil inventories in the US had spiked this week weighed heavily on oil prices and optimism as stocks continue to increase despite OPEC's production cut plans being put in force. When the amount of oil available is higher than the demand for the commodity, prices fall and this weighs heavily on demand for the oil-correlated Canadian Dollar.
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