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Could public sector borrowing data put pound under fresh pressure today?

business-articlesCould public sector borrowing data put pound under fresh pressure today?
  • Higher level of public sector net borrowing could dent pound

  • Canadian dollar could climb on gross domestic product data

  • Stronger durable goods orders may encourage US dollar rally


Pound vulnerable to higher government borrowing

GBP exchange rates could come under renewed pressure this morning if November’s public sector net borrowing figure points towards an increase in government debt.
As a higher level of borrowing exposes the UK economy to greater risk in the event of a no-deal Brexit this could drive the pound lower across the board.
Focus will also fall on the finalised third quarter gross domestic product data, although no change is forecast for the headline figures.
Any signs that underlying economic momentum is continuing to slow heading into the end of 2018, however, could sour the mood towards the pound.

Stronger gross domestic product to boost Canadian dollar

With oil prices continuing to slide in the face of weakening global demand the commodity-correlated Canadian dollar could struggle to find much support for much of today.
However, if October’s Canadian gross domestic product data shows a fresh acceleration this may give CAD exchange rates a solid rallying point.
As long as the economy reverses the monthly contraction in GDP seen in September the appeal of the Canadian dollar is likely to improve.
Stronger retail sales growth may also give investors incentive to buy back into the Canadian dollar this afternoon.

Durable goods orders rebound to benefit US dollar

Worries over the impact of the Federal Reserve’s continued push for tighter monetary policy could ease today, giving the US dollar room to breathe.
Confidence in the outlook of the US economy could also improve if November’s durable goods orders show an improvement on the month.
If orders pick up 1.7%, as forecast, this would suggest that domestic sentiment has improved, even in the face of slowing global growth and continued US protectionism.
On the other hand, another month of contraction may prompt USD exchange rates to shed further ground.

Upcoming Data:

Friday, 21st December 2018
09:30 GBP Public Sector Net Borrowing
09:30 GBP Gross Domestic Product
13:30 CAD Retail Sales
13:30 CAD Gross Domestic Product
13:30 USD Durable Goods Orders

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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