- GBP exchange rates boosted by High Court – Government appeals on Brexit block
- Euro remains mixed after unemployment stats – Forecasts positive for incoming PMIs
- US Dollar fails to recover ahead of election – Non-manufacturing PMI worse-than-forecast
Despite predictions that it would slump due to investor profit-taking today, the Pound has remained in high demand over the course of trading against the Euro and US Dollar. At the time of writing, GBP EUR and GBP USD were up at 1.1%, equating to 1.12 and 1.24 respectively.
While the Government has protested today’s historic ruling with an appeal, some have forecast that answering this charge will drag proceedings on to the point that a late March Article 50 trigger could be missed.
The Euro has largely remained static against its peers, due to no more major data emerging to shift EUR exchange rates.
For the US Dollar, the afternoon’s news has brought little relief. While the finalised October composite and services PMIs have both risen, the ISM non-manufacturing PMI for the same month has slipped from 57.1 to 54.8, a worse outcome than anticipated.
(Last updated November 3rd, 2016)
For the Euro, a forecast-matching drop in the Eurozone unemployment rate has failed to trigger a rally in the EUR GBP and EUR USD exchange rates.
The US Dollar has failed to fully shake off election concerns from earlier in the week, though it has been aided slightly by the latest Fed interest rate decision.
Pound Exchange Rate News: Sterling Rallies on Service PMI and High Court Ruling
The Pound has found itself in extremely high demand today, rising close to 1.12 against the Euro (GBP EUR) and to 1.24 against the US Dollar (GBP USD).
The latest news out of the UK has been that the High Court has blocked the Government from automatically triggering Article 50 next year; the decision will instead be made on a Parliamentary vote, assuming a government move to appeal the ruling isn’t successful.
This has been of great benefit to the Pound, which has jumped due to hopes of Article 50 (and the UK leaving the EU) being ultimately blocked.
Other UK news has also been beneficial, with the services PMI for October rising from 52.6 to 54.5, against forecast of a decline. This represented a 9-month high for the measure.
Euro Slumps after EZ Unemployment Adjustment, US Dollar Unstable during Election Countdown
September’s Eurozone unemployment figure fell to 10% as predicted, although a downwards revision to the August statistics revealed that employment had already been at the forecast low for longer-than-expected.
Elsewhere, however, the Euro has been held back by unemployment rising in Italy and Ireland recording a services PMI drop in October.
For the US Dollar, demand has been low against the Euro (USD EUR) at 0.90 and worse against the Pound (USD GBP) at the low end of 0.81.
While some of the earlier turbulence from Presidential Election fears seems to have died down, the US Dollar has still been unsettled by the fact that the historic vote is less than a week away.
In domestic news, the Federal Reserve left the US interest rate at 0.5% yesterday; this was largely forecast beforehand due to the timing of the election. Despite this, Pantheon Macroeconomics Chief Economist Ian Shepherdson has stated;
‘Only a shock [such as] the election of Trump or an external geopolitical or market event can now prevent a December hike’.
Future GBP EUR USD Forecast: Could BoE Inflation Report Shatter Sterling with Forecast Rise?
The day is not yet over for Pound exchange rate movement, as eagerly-anticipated Bank of England (BoE) announcements are still due at noon.
With another interest rate freeze at 0.25% forecast, investors are instead looking to the Inflation Report for change.
The present concern is that the BoE will report rising inflation in 2016 and forecast further increases in 2017, which could see UK residents run into problems if wage growth fails to rise in tandem.
From the Eurozone, tonight will bring a speech from European Central Bank (ECB) official Benoit Coeure, while tomorrow morning will see key October composite and services PMIs announced. Rises are expected across the Eurozone in both fields.
Looking to this afternoon, the US Dollar is set to be shifted by October’s composite and services PMIs, both of which are set to be revised upwards.
For the non-manufacturing PMI for the same month, however, a potentially damaging drop from 57.1 to 55.3 has been forecast.
Current Interbank Exchange Rates
The Pound Euro (GBP EUR) exchange rate was trending in the region of 1.12 and the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.89 today.
The Pound US Dollar (GBP USD) exchange rate was trending in the region of 1.24 and the US Dollar Pound (USD GBP) exchange rate was trending in the region of 0.80 today.
The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.10 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.90 today.