Initial Pound Strength Gives Way to Uncertainty as Brexit Begins

Published: 29 Mar at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China,

Pound Sterling (GBP)
The most volatile of the major currencies today, the Pound initially dropped when Theresa May began Brexit proceedings on Tuesday night. As the Article 50 trigger was heavily priced in, however, these losses were shortlived and Sterling soon recovered.
With Brexit now officially underway and negotiations imminent, the Pound has fluctuated wildly against peers due to widespread uncertainty.
The Pound may close weekly trading in a negative range, given that consumer confidence and annual growth rate figures are expected to worsen over Thursday and Friday.

Euro (EUR)
The Euro has dropped heavily today, potentially owing to fears that Brexit will embolden anti-EU parties across Europe.
Euro trading may pick up again on Thursday, when Eurozone-wide confidence stats are due. These are forecast to show rising confidence in most fields, which means a Euro rally is not out of the question.

US Dollar (USD)
US Dollar trading has brought significant advances against the soft Euro, but the Dollar to Pound exchange rate has been tighter due to an occasional burst of optimism for GBP.
The latest US political news has been that President Donald Trump is trying to scrap climate change laws, enabling more jobs to be created in fossil fuel extraction. A highly controversial plan, this could raise tensions between the US and more environmentally conscientious nations, all in a bid to fulfil a campaign promise.
Elsewhere, US pending home sales have risen by more than forecast, which has emboldened USD traders.
Thursday will bring US GDP figures for Q4. The finalised results are forecast to show a slowdown on the quarter, which may erode current confidence in the US economy.

Australian Dollar (AUD)
Iron ore prices have been responsible for the latest Australian Dollar rise, with a return of demand from China promising further gains for the commodity cost in the future.
Incoming AU data will consist of new home sales and private sector credit stats. In the former case, a drop of -2.2% came in February which means a rise could cause an AUD rally against peers.

New Zealand Dollar (NZD)
The New Zealand Dollar has capitalised on US uncertainties today, rallying against the Euro, Pound and US Dollar.
Domestic news has been limited but positive, with the focus being on future trade relationships between New Zealand and China.
While low impact, the week’s remaining NZ data could still allow further NZD gains. This will cover building permits on Thursday and business confidence on Friday.

Canadian Dollar (CAD)
On a day of international drama, the Canadian Dollar has risen against the Euro and Pound and traded tightly against the US Dollar.
Crude oil prices have risen sharply to over $49.30 per barrel recently, enabling the latest CAD appreciation.
With low-impact PPI figures due on Thursday, the Canadian Dollar is more likely to be moved over the end of the week by Friday’s January GDP figures.
On the month, a reprint at 0.3% is forecast.
As of Wednesday, 29th March 2017, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1556, GBP USD exchange rate was 1.244, GBP AUD exchange rate was 1.6229, GBP NZD exchange rate was 1.7686, GBP CAD exchange rate was 1.6585, and GBP CNY exchange rate was 8.571.

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