Pound Hits Best Levels Vs Euro, US Dollar Before Manufacturing Data
Upbeat UK Consumer Confidence data sent the Pound Euro and Pound US Dollar exchange rates higher on Wednesday.
Ahead of the release of the UK’s manufacturing PMI GBP EUR was trending in the region of 1.18 while GBP USD was trending in the region of 1.3139.
If the data improves on expectations, the Pound could extend gains.
(Previously updated 31/08/2016)
The Pound has fluctuated in exchange rates over the course of Tuesday’s European trading session, on the back of alternating positive and negative predictions for how the UK’s ‘Brexit’ negotiations may go. The next UK data to watch out for will come early tomorrow, when the Gfk consumer confidence result for August is due; this has been forecast to move closer to a positive range.
The Euro fell over Tuesday morning and fluctuated over the rest of the day, when the Eurozone confidence stats for August fell in all fields. Tomorrow may bring redemption for a battered Euro, when the German and Eurozone unemployment rate figures are announced over the course of the morning.
The US Dollar has been in a strong position over Tuesday, thanks to both the Redbook retail sales and CB consumer confidence figures for August rising. Tomorrow will bring a trio of Fed speeches, as well as the US’s rise-forecast ADP employment change printing for August.
(Last updated August 30th 2016)
The Euro has been impacted by a lack of confidence after the release of recent domestic data, while the US Dollar has staged a recovery in the wake of last week’s market-upsetting speech from Fed Chair Janet Yellen.
UK Economic News: German Economy Minister Speaks against One-Sided UK ‘Brexit’ Outcome
The Pound has been a poor choice against the Euro and US Dollar today, having trended in a tight range against the Euro (GBP EUR) and fallen by -0.2% against the US Dollar (EUR USD).
The latest UK economic data has focused on mortgage lending in July; a dip from 3.2bn to 2.7bn has been recorded on the month.
The number of mortgages being approved was at its lowest for 19 months. Howard Archer of IHS Global Insight remarked; ‘Mortgage approvals for house purchases have progressively slowed after being buoyed in the first quarter by buy-to-let and second home sectors rushing to beat April’s Stamp Duty increase for these sectors’.
One of the biggest drags on the appeal of the UK currency has come from Germany, where German Economy Minister Sigmar Gabriel has argued that in order to keep the EU together after the UK leaves, the departing nation cannot be allowed ‘to keep the nice things’, otherwise a dangerous precedent will be set and other Eurosceptic governments may attempt to separate themselves from the multinational union.
Euro Unsettled by Spanish Inflation Stats, US Dollar Stable after Falling Manufacturing Index
The Euro has fluctuated against most of its regular peers so far today, having risen by 0.2% against the Australian Dollar (EUR AUD) and 0.4% against the Japanese Yen (EUR JPY), but fallen by -0.2% against the US Dollar (EUR USD) and trended tightly against the Pound (EUR GBP).
The most recent data out of the single currency bloc has concerned import prices from Germany and Spanish preliminary inflation rate results; in the former case, July’s prices have either remained in or moved closer to positive ranges, while Spanish base inflation in August has conversely risen on both the month and the year.
The US Dollar has been in high demand during Tuesday’s trading session, having climbed by 0.4% against the Australian Dollar (USD AUD) and the Norwegian Krone (USD NOK) and 0.5% against the Japanese Yen (USD JPY).
While yesterday’s Dallas Fed manufacturing index for August fell from -1.3 to -6.2, the more impactful event on the ‘Buck’ has been the previous week’s comments from Fed Chair Janet Yellen.
At the time, the influential Fed official confused markets, by offering a partially hawkish tone but also outlining how the central bank was poised to combat a possible US recession. Speaking on this latter topic, Yellen said;
‘In addition to taking the Federal-funds rate back down to nearly zero, the [Federal Open Market Committee] could resume asset purchases and announce its intention to keep the Federal-funds rate at this level until conditions had improved markedly’.
Future GBP, EUR, USD Forecast: UK, Eurozone and US Confidence Stats Incoming
The next major economic data will come shortly from the Eurozone, when the August economic, business, industrial and services sentiment scores are announced, along with the finalised consumer confidence figure for August. With the exception of the services score, forecasts have been for declines across the board.
US confidence results are also impending today, consisting of the CB consumer confidence figure for August.
The UK’s weekly confidence result will consist of the GfK consumer confidence printing for August; this has been predicted to show improvement when it come out early on Wednesday.
The GfK Consumer Confidence measure dropped dramatically in July to -12 as responses reflected the uncertainty inspired by Brexit. However, economists have envisaged that the index will edge up to -8 in spite of ongoing concerns about the impact of the decision to break from the European Union on the UK economy.
Current GBP, EUR, USD Exchange Rates
The Pound Euro (GBP EUR) exchange rate was trending in the region of 1.1701 and the Euro Pound exchange rate was trending in the region of 0.8546 today.
The Pound US Dollar (GBP USD) exchange rate was trending in the region of 1.3068 and the US Dollar Pound (USD GBP) exchange rate was trending in the region of 0.7652 today.
The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.1170 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.8956 today.