‘Aussie’ Plummets as Markets Price in RBA Rate Cut

Published: 20 Feb at 4 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, Germany,

Pound Sterling (GBP) Stumbles despite Upbeat UK Consumer Spending

The Pound (GBP) suffered losses during today’s session despite the release of better-than-expected retail sales data.

Data showed British consumers began spending again at the start of the year after a disappointing last few months of 2019. The upbeat figures added to signs that the economy has rebounded following December’s general election which saw Boris Johnson secure a large majority.

However, looking to Friday’s session, Sterling could suffer further losses following the release of flash PMI surveys. If data reveals Britain’s manufacturing sector has slumped back into contraction after escaping it for the first time in eight months, GBP will slump.

Pound Euro (GBP/EUR) Exchange Rate Falls despite Weak German Confidence

The Pound Euro (GBP/EUR) exchange rate slumped despite the release of weak German consumer confidence data.

Thursday’s GfK survey showed that consumers in the bloc’s largest economy were less willing to spend, thanks to the risks associated with the spread of Covid-19. Many consumers believe that the outbreak will leave the already struggling economy gasping for breath.

Looking ahead, the single currency could suffer some losses following the release of further German data. EUR will slide if Germany’s manufacturing sector continues to suffer, slumping further into contraction territory in February.

Cautiously Optimistic Fed Sends Pound US Dollar (GBP/USD) Exchange Rate Lower

The Pound US Dollar (GBP/USD) exchange rate slipped on Thursday afternoon, after investors headed for the safe-haven Dollar as coronavirus fears increased. Following the deaths of two elderly passengers on a cruise ship quarantined in Tokyo, scientists warned the virus could spread more easily than previously thought, buoying USD.

Added to this, Federal Reserve monetary policy minutes revealed policymakers were cautiously optimistic, offering USD further support.

Looking ahead, US Flash PMI data could provide the Dollar with further support. If both the US manufacturing and service sectors expand in February, GBP/USD is likely to fall further.

Pound Canadian Dollar (GBP/CAD) Exchange Rate Slides as Oil Prices Hold Near One-Month High

The oil-sensitive Canadian Dollar (CAD) edged higher against the Pound (GBP) after Brent oil prices held near a one-month high today. Another drop in new Covid-19 cases and supply concerns in both Venezuela and Libya boosted prices.

Meanwhile, China’s decision to cut its benchmark lending rate earlier today helped to ease worries surrounding oil demand.

Looking ahead, the Canadian Dollar will continue to benefit from further gains in oil prices. If oil prices continue to remain steady, edging higher, the ‘Loonie’ will continue to rise.

Pound Australian Dollar (GBP/AUD) Exchange Rate Jumps as Markets Price in RBA Rate Cut

The Pound (GBP) was able to edge higher against the Australian Dollar (AUD) after disappointing Aussie labour market statistics.

Unemployment shot higher than expected in January, rising from 5.1% to 5.3%, leaving the ‘Aussie’ under pressure. Markets are now pricing in a higher chance of an interest rate cut from the Reserve Bank of Australia (RBA) as soon as April.

Looking ahead, AUD could slump further following the release of CommBank’s flash PMI surveys. If data shows the Australian PMI composite has slumped into contraction territory in February, the Australian Dollar could suffer further losses.

Pound New Zealand Dollar (GBP/NZD) Exchange Rate Rises on Covid-19 Fears

The Pound New Zealand Dollar (GBP/NZD) rose on Thursday as risk appetite declined further, with investors rushing to safe haven currencies.

Investors moved away from riskier assets, such as the ‘Kiwi’ after scientists warned Covid-19 could spread more easily than originally thought. This came after the shock deaths of two elderly passengers aboard the cruise ship, the Diamond Princess, which was quarantined in Tokyo.

Looking ahead, the ‘Kiwi’ could remain under pressure if the risk-off mood continues throughout Friday’s session.

As of Thursday, 20th February 2020, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1942, GBP USD exchange rate was 1.2882, GBP AUD exchange rate was 1.947, GBP NZD exchange rate was 2.0337, GBP CAD exchange rate was 1.7081, and GBP CNY exchange rate was 9.0475.

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