The Pound to US Dollar (GBP/USD), Pound to Canadian Dollar (GBP/CAD), and Pound to New Zealand (GBP/NZD) exchange rates were trending lower in Wednesday’s European session. The Pound was buoyant yesterday after Phillip Hammond’s Spring Statement which gave positively revised growth forecasts for 2018 and said UK inflation would come back to target and boost real wages in the next year.
CAD Exchange Rate Sinks on Poloz and Rate Hike Hopes
The Canadian Dollar experienced losses on Tuesday, impacted by the price of crude oil and a dovish speech by Bank of Canada (BoC) Stephen Poloz. The Loonie dropped against the US Dollar and other currency majors, extending losses from fears of a trade war. Poloz’s speech started positively when he said:
‘The Canadian economy is carrying untapped potential that could prolong the expansion without causing inflation pressures.’
However, markets have the view that Poloz’s speech did little to encourage investors that interest rate rises would occur anytime soon, which pressured the CAD exchange rate lower.
US Dollar (USD) Exchange Rate Shaken by Trump’s Tillerson Sacking
The US Dollar experienced losses yesterday after US President Donald Trump sacked Rex Tillerson. Investors shied away from the US Dollar as investors grew concerned that the Trump administration might implement protectionist policies which could be detrimental to the US Dollar. One industry expert, Keith Underwood commented: ‘Trump just removed another voice of reason. Short-term traders took advantage of people’s fears over the tariffs and pushed the Dollar lower.’
Mike Pompeo, Director of the CIA, will become our new Secretary of State. He will do a fantastic job! Thank you to Rex Tillerson for his service! Gina Haspel will become the new Director of the CIA, and the first woman so chosen. Congratulations to all!
— Donald J. Trump (@realDonaldTrump) 13 March 2018
Meanwhile, Wednesday saw the US Advance Retail Sales number come in below forecasts at -0.1% in February. Economists had expected a 0.3% rise after the previous month’s -0.1%.
Kiwi Dollar (NZD) Awaiting New Zealand Gross Domestic Product (GDP) Numbers
In New Zealand, the Kiwi Dollar could be influenced by the highly influential fourth quarter Gross Domestic Product (GDP) figures. Economists expect an increase from 2.7% to 3.1% The New Zealand Dollar recently hit a two-week high against the US Dollar (NZD/USD) after US wage growth data disappointed investors, leading them to believe rate hikes would be pared back by the US Federal Reserve.