On Wednesday, Sterling edged lower to a six-week low of $1.2261 after a series of disappointing economic releases exacerbated the impact of the Dollar’s rally and suggested that the UK economy was beginning to suffer from the uncertainty around Britain’s planned exit from the European Union over the next two years. The Pound took a bad hit after a closely-watched survey on the country’s manufacturing sector suggested growth slowed to 54.6 in February, missing expectations of 55.7. Meanwhile, data from the Bank of England revealed £7.6bn drop in net overseas gilt holdings in the first month of the year.
On Wednesday as well, The Canadian Dollar slipped to a five-week low against its US Dollar as Bank of Canada left its benchmark interest rate steady at 0.5% and warned that it is keeping a watchful eye on “significant uncertainties” weighing on the outlook for the economy. The Central Bank expects growth in the fourth quarter of 2016, to come slightly stronger than predicted because of recent consumption and housing data releases. However, on the downside, the bank said that the Canadian exports continue to face competitiveness challenges while the job market has seen weaker growth in wages and hours worked. Furthermore, the bank added that some US proposals, which include a border tax and protectionist policies, would have “material consequences” for Canadian investment and exports.
As for the Australian Dollar, it fell 0.3% to a low $0.7645 as data showed the nation’s trade surplus narrowed by more than economists expected during January, somewhat in contrast to more recent data showing the economy to be in overall good health.