GBP Southbound, EUR Resilient, CAD Energized by Canadian Spending Spree

May 22, 2019 (Western Union Business Solutions)  – The euro was broadly steady with many players keeping to the sidelines on the eve of European elections. All eyes will be on how far right candidates fare in the Thursday to Sunday voting. Meanwhile, the euro’s winning streak against the embattled U.K. pound was on the cusp of a record. Another win today for EURGBP would mark the 13th consecutive day, the longest since the single currency’s inception in 1999. A wild card for the euro: Thursday data on German factory growth, seen contracting for a fifth straight month.

GBP

Sterling deepened a slide as it fell to new lows, hitting its weakest in more than four months against the greenback. Against the euro, sterling was on track for a record 13th straight day of losses. While down the pound may not be out, especially if Brexit should ultimately get called off. Still, heightened uncertainty over all things U.K. politics suggests that things could get worse before they get better for the pound. Meanwhile, underwhelming U.K. inflation today didn’t do the pound any favors as it argued against Britain raising interest rates anytime soon.

CAD

Canada’s dollar surged to one-month highs after bullish consumer spending suggested the Bank of Canada would not entertain an interest rate cut from 1.75% when it meets on May 29. Retail sales jumped by 1.1% in March, exceeding expectations. Adding to the report’s rosy glow, spending in February got revised higher. The data offered evidence of how months of strong hiring and low unemployment have started to translate into meaningful consumer spending, a good sign for first quarter growth, due on May 31.


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