- Euro uncertain as ECB holds fire on interest rate cut – Speculation mounts about possible September action
- Pound Sterling slumps along with retail sales – Pre-‘Brexit’ results paint alarming picture
- US Dollar slumps overall on prior data – Manufacturing outlook in Philadelphia
- Spate of Eurozone PMI results due today – UK and US to also offer PMI printings
The Euro has been an unstable option for investment of late, having risen against the Pound but slipped against the US Dollar on ECB news.
After firming earlier in the week in response to better-than-forecast UK employment figures, the Pound fell back as the weekend approached and the UK published less-than-impressive retail sales figures.
The US Dollar has been on the fence against peers, with a recent scattering of domestic data doing little to push the ‘Buck’ decisively in one direction.
Eurozone Economic News: Euro Unsettled as ECB Policy Easing Remains a Threat
The appeal of the Euro has taken a hit lately, on account of the biggest economic event of the week for the Eurozone failing to resolve pressing issues among single currency investors.
This has been the European Central Bank (ECB) interest rate decision for July, the first in the wake of the historic ‘Brexit’ vote made by the UK in June. The actual outcome matched with forecasts – the ECB left the interest rate on hold at 0%, though it was the press conference delivered by ECB President Mario Draghi afterwards that sparked the most frenzied debate among investors.
Caution was the watchword of Draghi’s speech, with estimates about the impact of ‘Brexit’ being tentative and most of the policymaker’s dialogue being reiterations of previous pledges to do whatever it took to keep the Eurozone ticking over.
A statement from Draghi that captured the tone of his speech was:
‘Over the coming months when we have more information including new staff projections we’ll be in a better position to assess the underlying macroeconomic conditions’.
Looking further ahead, economists have now been pencilling in September as the next likely time for any ECB action when it comes to policy decisions.
Pound Sterling Slides while US Dollar Treads Water
The value of the Pound has been undeniably low recently, with the latest UK ecostats serving to drain confidence away from the UK currency.
This has consisted of the retail sales stats for June, which have fallen in the base fields but also those excluding fuel purchases.
For the US, recent domestic data has been more divided overall; claims in July have fallen, while existing home sales in June have increased slightly. Balancing out this positivity has been a dip from 4.7 to -2.9 for the Philadelphia Fed manufacturing index, which measures confidence in the sector.
Future EUR, GBP, USD Forecast: PMIs due for Eurozone, UK and US Today
The near-future will bring the announcement of PMI printings for the Eurozone, covering the composite, manufacturing and services areas in July. On the whole, forecasts have been optimistic.
The opposite can be said of the UK’s composite, services and manufacturing PMIs; all three are expected to fall into contraction from the area of 52 points.
The US will only bring its July manufacturing PMI flash. This has a decline from 51.3 to 50.5 on the cards.
Recent EUR, GBP, USD Exchange Rates
The Euro Pound Sterling (EUR GBP) exchange rate has been trending in the region of 0.8336 and the Pound Sterling Euro (GBP EUR) exchange rate has been trending in the region of 1.1999 recently.
The Euro US Dollar (EUR USD) exchange rate has been trending in the region of 1.1014 and the US Dollar Euro (USD EUR) exchange rate has been trending in the region of 0.9080 recently.
The Pound Sterling US Dollar (GBP USD) exchange rate has been trending in the region of 1.3216 and the US Dollar Pound Sterling (USD/GBP) exchange rate has been trending in the region of 0.7567 recently.