The Pound Sterling US Dollar (GBP/USD) and Pound Sterling to Canadian Dollar (GBP/CAD) exchange rates were both trending lower in Tuesday’s European trading despite the UK’s trade deficit shrinking considerably.
UK Trade Deficit Shrinks, Pound Sterling (GBP) Exchange Rate Remains Weak on UK Prospects
The UK’s trade deficit managed to fall from a negatively revised -£3.093B in March, to -£1.202B in April. Economists had expected a smaller slip to -£2.600B. The UK trade deficit is now residing at the lowest level in the past 13 months.
Economist Howard Archer commented: ‘The strength of the Pound against the Euro threatens to continue to constrain the upside for UK manufacturing exports to the Eurozone. Both the manufacturing purchasing managers and the CBI indicated in their May surveys that Sterling’s strength continues to be challenging for UK manufacturing exporters.’
However, the Confederation of British Industry (CBI) announced that it was cutting its growth forecasts.
Currency strategist Eimear Daly commented: ‘The CBI cut their current account outlook for the UK—that’s weighing on Sterling today as well as UK referendum fears.’
US Dollar (USD) Exchange Rate Recovers from Obama Comments – US Advance Retail Sales Ahead
Meanwhile, the US Dollar rebounded in Tuesday’s European trading after suffering losses on Monday. The ‘Buck’ exchange rate dipped when it was rumoured that President Barack Obama had stated that the US Dollar (USD) was too strong. However, both the White House and the President rebuffed the claims.
Obama stated: ‘Don’t believe unnamed quotes. I did not say that. I make a practice of not commenting on the daily fluctuations of the Dollar or any other currency.’
At the moment all data is being carefully eyed for signs that a Federal Reserve interest rate hike could be on the way. US Wholesale Inventories data will be out later in Tuesday’s trading and could have a moderate impact on the US Dollar (USD) exchange rate.
Meanwhile, Thursday will be an influential day for the US currency with the highly anticipated US Advance Retail Sales stat due to emerge. Friday will continue with the US University of Michigan Confidence ecostat which is expected to create major US Dollar (USD) exchange rate ripples.
The US Dollar to Pound Sterling (USD/GBP) exchange rate is trending in the region of 0.6541 with +0.34% market movement.
The US Dollar to Canadian Dollar (USD/CAD) exchange rate is trending in the region of 1.2400 with -0.12% market movement.
Canadian Dollar (CAD) Exchange Rate Climbs versus Pound (GBP) and US Dollar (USD)
The Canadian Dollar has risen against both the US Dollar (CAD/USD) and Pound Sterling (CAD/GBP) as the price of oil increased on account of higher seasonal demand in developed nations.
Industry expert Olivier Jakob commented: ‘There is currently seasonal demand for oil, so there is less of a build in crude oil stocks. But there is still too much oil for the rally to take hold.’
Oil prices softened initially when weaker-than-forecast Chinese ecostats came to light. Chinese oil imports slipped by 11% in the month of May on the year in the largest drop seen since 2013.
The Canadian Dollar to Pound Sterling (CAD/GBP) exchange rate is trending in the region of 0.5280 with +0.46% market movement.
The Canadian Dollar to US Dollar (CAD/USD) exchange rate is trending in the region of 0.8070 with +0.06% market movement.
Pound Sterling (GBP) Exchange Rate Forecast: GBP/USD, GBP/CAD set to Fluctuate on UK GDP Estimate
Wednesday could be an interesting day for the Pound Sterling exchange rate with both UK Industrial Production and Manufacturing Production figures due for release. Furthermore, the UK’s NIESR Gross Domestic Product (GDP) Estimate will emerge in Wednesday’s European trading and could have an interesting impact on the Pound Sterling (GBP) exchange rate.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is trending in the region of 1.5282. The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is trending at 1.8952.