- Pound Sterling slides after day of profit-taking – Concerns surface about Nissan ‘assurances’
- Euro positive overall ahead of ECB speeches – Italian wage stats failed to excite
- US Dollar mixed as durable goods orders drop – Major US GDP stats out tomorrow
The Pound has fallen against the Euro and the US Dollar by a considerable amount this afternoon, seeing a -0.6% decline in both cases. As well as being battered by two rounds of profit-taking, the Pound has also lost out in the aftermath of Nissan’s news.
While the carmaker was praised for choosing to build in the UK under government ‘assurances’, the exact nature of the agreement has been questioned. Among the present theories is that the government could controversially chose to pay Nissan’s EU-incurred tariffs when the UK finally exits the European Union.
The Euro has managed to largely hold onto its gains today, though the latest Italian wage inflation results for September caused little joy when they failed to rise as expected.
In the US, the ‘Buck’ has been unsettled by falling claims as well as falling orders, the latter of which were forecast to rise. On Friday afternoon, the US Dollar could well rally against the Pound and the Euro, should the Q3 GDP growth rate increase from 1.4% to 2.5% as expected.
(Last updated October 27th, 2016)
Euro exchange rates have been positive overall, thanks to recent news out of Germany’s financial sector, while the US Dollar has been mixed despite supportive data on Wednesday.
Pound Sterling Exchange Rate News: GDP Boost Provides Short-Lived Gains for GBP
Pound Sterling exchange rates spiked up during trading earlier today due to a knee-jerk investor reaction, though since then gains have mostly been replaced with losses.
The big news of the day has been that preliminary Q3 GDP growth rate figures have risen on the year and fallen slightly on the quarter; these results came against forecasts of a yearly decline and greater level of quarterly slowdown.
The Pound jumped against the Euro and US Dollar in the immediate aftermath, but has since fallen into negative ranges in both cases, almost dropping from 1.12 to 1.11 in the GBP EUR exchange rate pairing.
While some were quick to cite the data as evidence of no Brexit impact, Aberdeen Asset Management Fund Manager Thomas Laskey was more cautious, stating;
‘Brexit has the potential to be extremely costly to the UK and the country could be poorer as a result. We’ve already seen this reflected in Sterling’s dramatic drop. Growth will probably slow as import costs increase and people’s incomes fall as inflation rises’.
Euro Strong on Deutsche Bank Relief, US Dollar Aided by PMI Printings
Euro exchange rates have been positive across the board today, though in some cases EUR has failed to move far above opening levels.
The latest supportive news has been that Deutsche Bank, Germany’s largest lender, has posted a surprise profit, which has dispelled some fears that the major institution might collapse under financial pressures in Germany and from US authorities.
Other Euro support has come from Spain, which has shown a drop in unemployment in Q3 from 20% to 18.91%.
Meanwhile, the US Dollar has been a positive performer overall, though USD has trended tightly against a number of regular peers.
Yesterday afternoon brought the last supportive data for the US, which consisted of rising figures for the composite and services PMI flash results in October.
Future GBP EUR USD Forecast: Early UK Confidence to Close Off Pound Movement Tomorrow
The last UK data of the week is expected to be high-impact, consisting of October’s GfK consumer confidence figure. This is currently predicted to worsen from -1 to -2.
Elsewhere, European Central Bank (ECB) officials Peter Praet and Yves Mersch are due to speak this evening, potentially affecting the Euro, while the US Dollar could be influenced by the early afternoon’s September durable goods orders, which have been predicted positively.
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 1.22 and the US Dollar Pound (USD GBP) exchange rate was trending in the region of 0.81 today.
The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.09 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.91 today.