Pound Sterling Weakens as Manufacturing PMI Slips to Eight-Month Low
Even though the Markit manufacturing PMI for February didn’t fall quite as far as expected yesterday, the -0.1 slip in the index was still enough to take the measure down to an eight-month low.
A sharper-than-expected fall in net consumer credit and net lending secured on dwellings during January further dampened appetite for the Pound.
Bank of England Governor Mark Carney is due to give a speech at the inaugural Scottish Economics Conference today.
GBP/EUR Recovers Losses after Strong US Data Pressures Euro
Early losses against the Euro were recovered yesterday afternoon after strong US data pressured the common currency lower.
The Euro had been boosted by a surprise downwards revision to last month’s unemployment data, which has showed that the rate of joblessness in the currency bloc had reached a nine-year low in December of 8.6% - a level not expected to be reached until this month.
German retail sales figures could undermine the GBP/EUR exchange rate today, given the forecasts are for a strong recovery after December’s slump.
GBP/USD on the Decline after Strong US Jobless Claims Figures Hit 48-year Low
Personal income growth unexpectedly held steady at 0.4%, the ISM manufacturing index defied forecasts of a slide to climb to 60.8 and the initial jobless claims rate fell to a 48-year low.
The finalised University of Michigan sentiment index is expected to show a slight downwards revision on early estimates to 99.5, but this is highly unlikely to weigh on USD strength today.
Smaller-than-expected Canadian Current Account Deficit Undermines GBP/CAD
The GBP/CAD exchange rate recorded choppy gains until midday, but then slumped after the latest Canadian current account balance figures showed a better-than-expected deficit of -C$16.35 billion, rather than the smaller narrowing from -C$18.59 billion to -C$17.65 billion.
Even though the RBC manufacturing index weakened slightly, the Canadian Dollar was unperturbed.
Canadian GDP figures for December may boost CAD today, depending upon whether traders focus on the faster pace of annualised growth or the slower pace of month-on-month expansion, assuming forecasts are correct.
GBP/AUD Weakens as Australian Dollar Resists USD Strength
The Pound to Australian Dollar exchange rate eventually lost its footing and slipped lower towards the end of the day yesterday.
Even some disappointing Australian data, showing a surprise -0.2% contraction in capital expenditure during the fourth-quarter of 2017, couldn’t prevent AUD from strengthening versus GBP.
Markets Shrug Off USD Strength and Buy New Zealand Dollar; GBP/NZD Weakens
Although the strong US economic data should have been pressuring the New Zealand Dollar lower, the GBP/NZD exchange rate still recorded some losses yesterday.
Markets have remained cautious over high-risk currencies for some time due to expectations of tighter US monetary policy.
The latest round of economic data greatly increases the chances of four interest rate hikes this year, which is pretty-much a worst-case scenario for currencies like NZD.
When you hit the bottom, the only way is up, so speculators were cautiously returning to the ‘Kiwi’ yesterday.