US Wholesale Inventories Rise to Bolster US Dollar (USD) Demand
After a stronger-than-expected September US Wholesale Inventories figure, which rose to 0.5% rather than falling to 0.0% as forecast, the US Dollar (USD) experienced another rally yesterday afternoon. However, ahead of today’s raft of UK employment data the Pound (GBP) has been trending positively against rivals, with both the GBP/USD and GBP/EUR exchange rates making gains.
Despite a greater-than-expected weakening on the British Retail Consortium (BRC) Like-for-Like Sales in October the GBP/EUR exchange rate has remained on an uptrend this morning, with the GBP/USD pairing more bearish as a result of positive US data.
BRC Like-for-Like Sales Decline ahead of Black Friday, Pound (GBP) Remains Buoyant Today
Following the disappointment of last week’s dovish Bank of England (BoE) Inflation Report, sentiment towards the Pound (GBP) has remained somewhat muted. Nevertheless, traders were somewhat encouraged on Monday by comments from the Organisation for Economic Co-operation and Development (OECD), which suggested that the UK economy would benefit from the central bank opting to raise interest rates in early 2016.
While the British Retail Consortium (BRC) Like-for-Like Sales were revealed to have contracted sharply overnight, falling from 2.6% to -0.2% in October, this less optimistic result failed to particularly dampen the appeal of Sterling. Some of this slowing in sales was blamed on shoppers holding off ahead of the major discounts of Black Friday, with investors confident that retail demand will strengthen in November.
Euro (EUR) Downtrends Today as Concerns with Greece and Portugal Dominate Eurozone Sentiment
Although the German trade surplus was shown to have widened further than forecast in September and the Sentix Eurozone Investor Confidence Index showed a decided uptick, the Euro (EUR) has continued to soften this week. Largely this is due to concerns stemming from both Greece and Portugal, with traders taking a more dovish approach to the common currency in the face of the Eurozone’s latest problems. While a coalition of left-wing parties are preparing to oust the current Prime Minister of Portugal, the release of Greece’s next tranche of bailout funds has been delayed by a disagreement over the threshold value of homes covered by the country’s foreclosure laws.
With a lack of fresh Eurozone economic data due over the next day the single currency is likely to experience further volatility as the future of the Eurozone comes under question once again.
US Dollar Currency News: USD Extends Gains as Odds of 2015 Fed Interest Rate Move Increase
Investors continue to flock to the US Dollar (USD) today as the odds of a December interest rate rise from the Fed remain strong. Monday’s US Labour Market Conditions Index unexpectedly rose from 1.3 to 1.6, offering further indication that the domestic job market is strengthening after Friday’s hawkish Change in Non-Farm Payrolls report.
This afternoon’s domestic Wholesale Inventories figure is expected to show stagnation on the month, which would suggest that consumer demand within the world’s largest economy held steady in September. While a more bearish result is unlikely to particularly weigh on the ‘Greenback’, a strong showing would give an additional boost to the appeal of the US Dollar.
Current GBP, EUR, USD Exchange Rates
At time of writing, the Pound Sterling to Euro (GBP/EUR) exchange rate was making gains in the region of 1.4066, while the Pound Sterling to US Dollar (GBP/USD) pairing slumped around 1.5103. Meanwhile, the Euro to US Dollar (EUR/USD) exchange rate was ceding ground in the range of 1.0735.