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Can UK GDP uptick encourage pound rally?

business-articlesCan UK GDP uptick encourage pound rally?
  • Improved UK gross domestic product to boost pound

  • Soft housing market may reverse Canadian dollar uptrend

  • New Zealand dollar to find support if economic activity strengthens


Pound vulnerable ahead of trade and growth data

With market jitters mounting ahead of the key parliamentary vote on Theresa May’s Brexit proposal the pound may struggle to find much support today.
October’s UK trade balance data could put additional pressure on GBP exchange rates if the deficit widens further on the month, highlighting the vulnerability of the UK economy.
However, a rallying point could be in store for the pound if October’s monthly gross domestic product proves encouraging.
An uptick in growth after the stagnation seen in August and September could encourage investors to pile back into the pound, even if growth remains below its historical average.

Weaker housing market could reverse Canadian dollar gains

Friday’s surge in demand for the Canadian dollar may ease off today as the impact of the unexpectedly positive Canadian labour market data fades.
CAD exchange rates may come under renewed pressure this afternoon if the latest signs from the domestic housing market appear negative.
With confidence in the outlook of the Canadian economy already limited, in spite of Friday’s positive data, any fresh signs of weakness could weigh heavily on the Canadian dollar.
On the other hand, another better-than-expected result may encourage CAD exchange rates to extend their bullish gains.

Signs of stronger economic activity to boost New Zealand dollar

While market risk aversion has limited the appeal of the New Zealand dollar a rally could come on the back of tonight’s ANZ truckometer reading.
The measure of New Zealand traffic volumes acts as a gauge of domestic economic activity, with a higher rate of traffic suggesting stronger growth as more goods are transported through the system.
As a result, an uptick in the index could encourage NZD exchange rates to recover some ground overnight.
Any deterioration, however, would leave the New Zealand dollar exposed to downside pressure as worries over the health of the global economy persist.

Upcoming Data:

Monday, 10th December 2018
09:30 GBP Trade Balance
09:30 GBP Gross Domestic Product
13:30 CAD Building Permits
21:00 NZD ANZ Truckometer

Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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