Daily Currency Update
GBP - British PoundSterling traders are looking forward to the first estimate for fourth quarter growth due later this morning with markets predicting that the UK economy ground to a halt at the end of last year as the Brexit crisis enveloped the country. With uncertainty over the UK's exit from the EU hanging like a guillotine its predicted that the economy trod water from Oct-Dec with only some certainty offered by the Tories commanding general election victory on Dec 12th, just before many business' broke up for Christmas. A flat reading is eyed with anything north or south like of this likely to move the pound to a limited extent. Under usual circumstances a big beat or miss of expectations would likely see a pound rally/slump however it looks like the quarter will have been written off by the markets, especially now that we have left the EU smoothly and growth appears to have rebounded in Q1, despite another cliff edge re: trade now being on the horizon. At the same time as the quarterly GDP figure we will get the rolling m/m estimate for Dec/Jan as well as Manufacturing Production m/m for the same period. Later this afternoon we have Mark Carney giving one of his last speeches as head of the Bank of England before the House of Lords Economic Affairs Committee. Carney hands over the reigns to Andrew Bailey on 15th March. GBP/USD hovers around 1.29 with GBP/EUR at 1.1825.
Key Movers
The coronavirus outbreak continues to dominate news with the death toll now exceeding 1000, the vast majority of which are in China. Some comfort is being taken by the fact that it appears the daily rate of infection seems to have peaked. In total there has been over 42k cases now reported however many more will be affected by the outbreak and its likely to run for several more weeks if comparable to historical outbreaks such as SARS. The news about daily infections starting to drop is probably a reason why equity markets are up around the world and the aussie and kiwi dollars are paring losses as Europe comes online. It looks like it will take another breakthrough for USD/JPY to break above 110 which is offering stubborn resistance at present.Later today sees Fed Chairman, Jerome Powell give testimony before lawmakers in Washington on the state of the US economy. Any hints on changes of monetary policy will be looked for, although a neutral stance is the current mantra from the Fed. We also have Christine Lagarde speaking at Strasburg at the presentation of the 2018 ECB Annual Report.Tonight sees the Reserve Bank of New Zealand give its interest rate decision with no change of policy predicted. EUR/USD trades at 1.0910.
Expected Ranges
- GBP/USD: 1.2850 - 1.30 ▲
- GBP/EUR: 1.1760 - 1.1920 ▲
- GBP/AUD: 1.9180 - 1.9330 ▼
- GBP/NZD: 2.0125 - 2.03 ▲
- GBP/CAD: 1.71 - 1.7250 ▲