Weaker BRC Sales Data Softens Pound Sterling (GBP) Today
February’s BRC Like-for-Like Sales proved more disappointing than investors had anticipated this morning, clocking in at 0.1% rater than 0.5% as growth in retail demand all but stalled on the year. As a result the Pound Sterling to Euro (GBP/EUR) exchange rate has remained on a downtrend around 1.2924, while the Pound Sterling to US Dollar (GBP/USD) exchange rate has been trending lower in the region of 1.4252.
Traders are lacking incentive to favour the Pound (GBP) today as a return to market bearishness has shored up both the Euro (EUR) and the US Dollar (USD).
Pound Sterling (GBP) Trends Lower on ‘Brexit’ Worries
With nothing in the way of domestic data due today the Pound (GBP) has been trending lower once again, as investors continue to lack significant cause for optimism. Although Sterling recovered some ground last week, due to a calming in the initial bout of ‘Brexit’ fears, a series of weak UK PMIs dented confidence in the outlook of the domestic economy. As there is little to distract traders from the looming potential of a ‘Brexit’ vote, the Pound has thus returned to a slump across the board on Monday morning.
The Pound will be hoping to rally later in the week on January’s UK Industrial and Manufacturing Production figures, with forecasts suggesting that the start of the year saw a modest improvement in output. As uncertainty is expected to weigh heavily on the UK economy in coming months, however, any signs of fresh weakness are likely to prompt a greater Sterling downtrend.
German Factory Orders Bolster Euro to Pound Sterling (EUR/GBP) Exchange Rate Today
A renewal in market jitters has helped the Euro (EUR) to climb this morning as concerns over the future of the global economy prompt a fresh bout of risk aversion. Confidence in the single currency has equally been bolstered by the latest German Factory Orders report, which showed a far stronger than expected recovery on the year in January. Jumping from -2.2% to 1.1%, this seems to suggest that the Eurozone’s powerhouse economy was in a healthier state than investors might have anticipated.
Later in the day the common currency may come under pressure if European ministers fail to reach a satisfactory agreement with Turkey on the pressing issue of mass migration, a matter that appears to threaten the very cohesion of the union. The Euro could also weaken if the fourth quarter German GDP proves discouraging tomorrow, as the strength of Germany’s economy remains crucial to the outlook of the currency union as a whole.
US Dollar (USD) Exchange Rate Climbs despite Mixed Payrolls Report
Friday’s unexpectedly bullish Non-Farm Payrolls report failed to particularly bolster the US Dollar (USD), due to a stronger jobs figure contrasting with disappointingly weak wage growth in February. As a result the chances of an imminent Federal Open Market Committee (FOMC) interest rate rise were seen to diminish, denting the appeal of the ‘Greenback’. Nevertheless, with global markets in a more sombre mood today the US Dollar has been recovering ground on the back of increased safe-haven demand.
Should this afternoon’s US Labour Market Conditions Index demonstrate a continued tightening the ‘Greenback’ is likely to remain on an uptrend against rivals. However, should Fed policymaker Lael Brainard take a more dovish tone in comments at the International Banking Conference this evening the Pound Sterling to US Dollar (GBP/USD) exchange rate may begin to regain lost ground.
Current GBP, EUR, USD Exchange Rates
At the time of writing, the Pound Sterling to Euro (GBP/EUR) exchange rate was trending lower at 1.2915, while the Pound Sterling to US Dollar (GBP/USD) pairing was slumped in the region of 1.4155. Meanwhile, the Euro to US Dollar (EUR/USD) exchange rate was on a downtrend around 1.0959.