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The pound managed to hold its own against the other majors at the beginning of the week despite a lack of UK news.
The GBP/EUR exchange rate meandered from €1.1817 to €1.1864, GBP/USD lingered at $1.2933 (close to an eight-month high), GBP/AUD jumped to a new eight-month high of AU$1.7636 and GBP/NZD advanced to NZ$1.8800. GBP/CAD lost ground as oil prices rallied, with the pairing falling from C$1.7769 to C$1.7708.
Will the pound stay at its current highs? Keep scrolling to find out…
What’s been happening?
As the French Presidential election and its potential ramifications had been so hyped up, the impact of the result on the currency market was pretty anti-climactic.
The euro rallied briefly, but without much gusto, and concerns that new President Emmanuel Macron will have trouble implementing his economic reforms meant EUR exchange rates swiftly slid back.
If Macron’s En Marche! party fails to make inroads in June’s General Assembly election, he may struggle to make his Presidency a success.
No particularly pound-stimulating news emerged from the UK, so the pound’s gradual march higher was largely the result of external events.
That being said, GBP exchange rates were supported overnight by a better-than-forecast like-for-like sales report from the British Retail Consortium (BRC). Like-for-like sales were up 5.6% – smashing predictions for an increase of 0.5%.
Sterling was able to strike a new eight-month high against the Australian dollar as Australian retail sales data flopped, but hints that the OPEC is thinking about extending its production cut gave oil prices a boost and saw the pound dip against the Canadian dollar.
What’s coming up?
This morning’s German releases failed to give the euro a lift against the pound. Industrial production in the Eurozone’s largest economy was shown to have grown by less-than-expected on the year in March, while separate trade data revealed a widening in the nation’s trade surplus – with both export and import levels exceeding expectations.
Once again there is nothing on the UK economic calendar to give the pound direction, so any moves the currency makes will occur thanks to outside influence.
Canada’s building permits report could help the pound recoup yesterday’s losses against the Canadian dollar if it shows another monthly decline.
While the week is getting off to a bit of a slow start, it could conclude with a bang. Thursday is jam-packed with UK developments – including the publication of industrial and manufacturing production data, the release of trade balance figures and the announcement of the Bank of England’s (BoE) latest interest rate decision.
