The Pound to US Dollar (GBP/USD) exchange rate sank on Thursday after US Advance Retail Sales printed positively and UK wages remained uninspiring. Meanwhile, the Pound jumped dramatically by over 2.0% against the Turkish Lira (GBP/TRY) as political developments unfolded and investors sold-off emerging market currencies; Sterling also made gains against the New Zealand Dollar (GBP/NZD).
US Trade Tensions Impact Markets and Oil Prices
It’s a relatively quiet week for economic data not from just the UK and Eurozone, but also the US, meaning other factors have increased opportunity to influence currencies more significantly. US trade tensions between Washington and China could massively impact markets this week and also drive the price of oil higher. Oil has risen by around 75% since June 2017 which has created higher petrol costs and travel fares. Oil prices have now hit fresh four-year highs at over $79 per barrel.
The shift higher in fuel costs comes at a time when UK wages are already remaining rather uninspiring, especially when considering pre-Global Financial Crisis (GFC) levels.
New Zealand Dairy Prices Rise, GBP/NZD Exchange Rates Climb
Meanwhile, in New Zealand, the latest global dairy trade auction showed a price rise of 2.7%, a welcome result after four price declines in a row.
Rural Economist Nathan Penny commented:
‘All up, this auction result hints at strong global demand. And with NZ production still relatively weak heading into winter, we expect prices, if anything, to creep a little higher over coming months.’
Turkish Lira Exchange Rate Drops Versus GBP, Reaching Record Lows against USD
The Turkish Lira hit a record low versus the US Dollar (TRY/USD) on Tuesday, and declined by around 2.50% versus the Pound (TRY/GBP). The drop came after Turkish President Recep Tayyip Erdogan vowed he’d be taking more control over monetary policy should he be successful in the Turkish election in June.
The Turkish President stated that he wold be lowering interest rates, and after the country adjusts from a parliamentary to presidential system, he’d be handed more control.
‘When the people fall into difficulties beacuse of monetary policies, who are they going to hold accountable? They’ll hold the President accountable. Since they’ll ask the President about it, we have to give off the image of a President who’s influential on monetary policies.’
Investors sold off the Turkish Lira amid a backdrop of unpopular emerging market currencies as worries about slower economic growth and higher debt levels surface.
The Pound to US Dollar (GBP/USD) exchange rate is trending at levels of . The Pound to Turkish Lira (GBP/TRY) exchange rate has been trading between highs of 6.0411 and lows of 5.8888.