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Currency News Daily Pound Sterling (GBP) Global Data Outlook - Poor for UK Currency

July 4, 2016 - Written by David Woodsmith

The Pound has been an unsafe option for investors today, having dived in the wake of gloomy Bank of England (BoE) forecasts.

Further parliament-based economic measures designed to improve the appeal of the UK economy, such as the earlier scheme to cut corporation tax, could turn voters against the Government, given their perceived pandering to multinational organisations.

Currency Market Movement Driven by Political Uncertainty in the UK, US and Australia

Political uncertainty in the UK, Australia and the USA, amongst other major developed nations, hangs over the currency markets, but that won’t stop a series of tier one data releases being published this week. Our leading data analyst takes a look at the likely market movements which will follow for the world’s leading currencies…

This week’s notable data sets are broadly split across two days and two hemispheres; tomorrow’s session brings key risk events from the Southern Hemisphere, while Friday delivers a brace of highly significant data releases from the Northern Hemisphere, and in particular North America.

RBA Interest Rate Decision to Provoke 'Aussie' (AUD) Volatility

The Reserve Bank of Australia (RBA) delivers its latest monetary policy announcement in the early hours of tomorrow morning – a ‘no change’ decision is expected, leaving Australian interest rates at their current record low level of 1.75%.

However, given the non-decisive outcome of the weekend’s Australian general election, a knee-jerk 25 basis point cut from the nation’s policymakers cannot be ruled out.

The fall-out from such an announcement would send the Pound Australian Dollar exchange rate GBP AUD sharply higher.

NZD Exchange Rate: GlobalDairyTrade Auction in Focus

Elsewhere, the results of the latest edition of the GlobalDairyTrade auction are penned in for publication tomorrow afternoon. Holders of the New Zealand Dollar (currency : NZD) will be nervously eyeballing the results following a disappointing showing for the all-important Whole Milk Powder (WMP) hammer price in the last two auctions.

A pronounced improvement from the fetching price of USD2,118 from a fortnight ago will be required to drive the New Zealand Dollar (currency : NZD) higher against the Pound.

Investors will have to wait until Friday afternoon for the next notable risk event. Last month’s US Non-Farm Payrolls data sent shockwaves through the currency markets, printing at a dire 38,000.

This month’s result will have to come in at, or close to, 200,000 in order to convince US Dollar holders that an American interest rate hike remains a possibility for this year. Anything less than this and the Buck loses ground against Sterling. Meanwhile, analysts forecast that Canadian jobs data, published at the same time, have the potential to reverse some of the recent losses for the GBP CAD exchange rate if they also disappoint.

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