Central Bank Interest Rate Decisions Dominate

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Pound Sterling Rocked by Continuing ‘Brexit’ Debate

Pound Sterling was strengthened by positive borrowing figures on Friday, which showed the government ran a smaller deficit than in the previous month. The Pound has been soft overall however as concerns over the effect of a ‘Brexit’ continue to loom. Unilever and Toyota have encouraged the ‘leave’ camp by confirming their UK operations won’t be scaled down if Britain leaves the EU, while Credit Suisse gave the ‘stay’ supporters ammunition with a catastrophic prediction regarding the negative economic effects of a split from the EU.

UK GDP is out tomorrow and is expected to show that economic growth has slowed slightly.

Mixed Data Sees Euro Fluctuate this Week

Mixed data has seen the Euro trading with volatility over the past seven days. A slew of poor data suggesting that Eurozone business activity had slowed was released on Friday, while Monday saw survey results suggesting economists were less optimistic regarding the prospects of the German economy. Data today has shown that German consumers are still optimistic however, strengthening the common currency.

German inflation data is due out tomorrow and could boost the Euro if it prints positively as expected.

US Dollar Softens as all Eyes Turn to Fed Interest Rate Decision

US Consumer Confidence unexpectedly rose in January, while other US data hasn’t been so supportive. However, all eyes are currently on the Federal Open Market Committee (FOMC) meeting to decide interest rates, with the result due out later today. The markets are hotly debating what the right course of action would be – the FOMC raised interest rates in December, but some are beginning to question whether that was a mistake.

Australian Dollar Battered by China Developments

Monday’s data showed that Australian business confidence had dropped, although compared to historical data it was still a positive result. Inflation was better-than-expected during the final quarter of the year, providing some good news to a currency battered by the Chinese slowdown. The Australian Dollar has managed to gain value in the face of trouble in the Chinese market. Worsening conditions make it more likely the People’s Bank of China (PBoC) will act to stimulate the economy, which could increase demand for Australian goods.

New Zealand Dollar Weakened by Approaching Interest Rate Decision

The Reserve Bank of New Zealand (RBNZ) is meeting to decide interest rates today. The markets aren’t expecting them to change the current rate, although it is widely expected that there will be at least one rate cut during the coming months. The interest rate is New Zealand is already at an historic low. Also due out later are New Zealand’s trade balance figures, which will show the difference between the country’s amount of imports and exports.

Canadian Dollar Slides Further on Plummeting Oil

It has been a light data week this week for Canada, although there were several key developments before the weekend. The Bank of Canada (BOC) left its interest rate on hold. This was important as many believed cutting the rate further would undermine confidence in the Canadian economy. Experts claim the onus now lies with the Canadian government to rescue the economy. Yearly inflation in Canada increased, but not as much as expected, while compared to the previous month prices decreased at a faster pace.

Posted by Rewan

Rewan is one of an in-house team of currency analysts working at TorFX, a leading foreign currency broker. In his role Rewan studies the latest currency market movements and writes about the impact of global economics and politics on exchange rates for several online and physical publications.

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