After careening lower on Tuesday the pound was able to stabilise ahead of the publication of the UK’s latest retail sales figures.
GBP/EUR recovered from €1.1293 to €1.1321, GBP/USD fluctuated between $1.3012 and $1.3033, GBP/AUD dropped to a new low of AU$1.6299, GBP/NZD advanced from NZ$1.7662 to N$1.7763 and GBP/CAD recovered from C$1.6399 to C$1.6444.
What’s been happening?
Wednesday was a slow news day for the UK, with a lack of any influential data releases giving the pound the chance to stabilise after falling so dramatically on the back of the UK’s latest inflation stats.
While Sterling extended losses against the Australian and Canadian dollars, it held firm against the US dollar and clawed back some ground against the euro.
The GBP/EUR exchange rate advanced 0.3% on the day’s opening levels as the Eurozone’s construction report detailed a decline in output.
The euro was also feeling the strain ahead of today’s European Central Bank (ECB) interest rate decision.
Meanwhile, the US dollar found a little support in the form of outperforming domestic housing data.
With both housing starts and building permits figures smashing forecasts, the US dollar was able to creep higher against the euro. Higher-risk currencies still held the higher ground against USD however as renewed concerns about Donald Trump’s presidency and faltering Fed interest rate hike expectations kept the North American currency pressured.
What’s coming up?
We could be in for a bit of a roller-coaster ride today in terms of currency movement, with the UK set to publish its latest retail sales figures and the European Central Bank (ECB) scheduled to deliver its interest rate decision.
Positive consumer spending figures for the UK could help Sterling recoup some of this week’s losses, while a surprising decline in sales has the potential to send GBP exchange rates to new lows.
Meanwhile, a dovish tone from European Central Bank (ECB) President Mario Draghi is likely to leave the euro struggling heading into the weekend.
Draghi is due to speak this afternoon and it is hoped that he will offer some insight into the ECB’s future policy plans.
Hints that the central bank is close to winding down its quantitative easing programme would be euro-supportive, while indications that policymakers are willing to continue their current wait-and-see approach for the next few months would be euro-negative.
The only US news to be aware of is the nation’s initial jobless and continuing claims figures.