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13th February 2017 - Exchange Rates News written by TorFX for Exchange-Rate.net
The Pound was able to sustain most of its gains last week thanks to strong UK data published on Friday.
December prints for trade, manufacturing, industrial production and construction output all came in better-than-projected. This helped the Pound hold its ground despite falling bets that the Bank of England (BoE) could take a hawkish stance in the foreseeable future.
Analysts perceived the strong UK manufacturing and industrial production results as a boost for Q4 Gross Domestic Product (GDP) expectations. Industrial production beat forecasts of 3.2% by coming in at 4.3% year-on-year, while manufacturing beat projections of 1.8% to score 4%. Britain's trade deficit also improved further than expected, to -£3.30b.
The Pound to US Dollar exchange rate trended flatly last week as both currencies grappled with the week's good and bad news.
A big corporate merger that saw mass amounts of GBP exchanged for USD also took place. British company Reckitt Benckiser agreed to purchase US baby formula company Mead Johnson Nutrition. The deal could see around £13.2b exchanged from Sterling to US Dollars.
Weakness in the US Dollar prevented it from gaining over Sterling last week however. Friday's US Michigan University confidence index unexpectedly fell to 95.7 - further than predicted.
The Pound to Euro exchange rate was able to sustain most of its gains last week thanks to strong UK data as political and economic concerns weighed down the Euro.
Concerns remained high that political populism could rise in the Eurozone during elections this year. The possibility of a key Eurozone nation withdrawing from the bloc due to nationalist policies has been seen as a huge threat to the Euro.
The Pound to Australian Dollar exchange rate was unable to sustain any gains last week. Despite Sterling's strength, the Australian Dollar was resilient due to increasing bets that the Reserve Bank of Australia (RBA) will not be returning to an easing bias any time soon.
This, as well as increasing demand for the 'Aussie' correlated commodity, iron ore, left AUD strong towards the end of last week.
However, concerns that Japanese growth may slow down from 1.4% to 1.0% year-on-year hurt Asian trade prospects when markets opened this week, causing risk-sentiment to fall.
The Pound to New Zealand Dollar exchange rate sustained considerable gains last week as the Reserve Bank of New Zealand (RBNZ) took a surprisingly dovish tone towards monetary policy outlook.
With market hopes that New Zealand could avoid further interest rate cuts dwindling, demand for the 'Kiwi' has been poor.
The Pound to Canadian Dollar exchange rate slumped by around half a cent on Friday and ended the week well below its best levels due to an increase in demand for the 'Loonie' following an impressive Canadian job market report.
Not only did Canada's participation rate unexpectedly improve to 65.9%, the unemployment rate also improved from 6.9% to 6.8% despite being expected to remain the same. The surprisingly upbeat report left the Canadian Dollar surging on Friday - but it slipped on Monday as risk-sentiment faded.
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