Pound Tumbles as Poor Industry Data Weighs on Economic Outlook
The Pound starts this week edging up from Friday’s lows. The production and trade data released before the weekend furthered GBP losses after revealing unexpected declines virtually across the board.
Industrial production slowed by -0.1% on the month during May, manufacturing production by -0.2% and construction output by -1.2%. All forecasts had been for growth. The trade deficit also widened by around -£1 billion more-than-expected.
GBP/EUR Hits Nine-Day Low as German Industry Thrives
GBP/EUR struck a nine-day low as strong industrial production figures from Germany pushed the Euro sharply higher on Friday. The common currency continues to hold its appeal today.
Seasonally-adjusted month-on-month production rose 1.2% in May, against forecasts of a 0.2% rise, while year-on-year working day-adjusted output accelerated to 5% instead of the 4% economists had expected.
Above-Forecast US Jobs Data Pushes GBP/USD Lower
Gains made by GBP/USD on Thursday quickly gave way to a new weekly low on Friday. An upside surprise from the latest non-farm payrolls report saw the US Dollar making sharp gains against several of its peers.
Analysts had predicted that job creation would rise to 178,000 during June, but the NFP instead showed that the workforce increased by 222,000. This has helped push the odds of at least one more US interest rate hike this year up to almost 60%.
Canadian Dollar Bounds Higher on Unemployment Drop, GBP/CAD Slumps
Despite strong demand for safer currencies that would usually have undermined the Canadian Dollar, the GBP/CAD exchange rate tumbled to a 12-and-a-half-week low on Friday.
Strong jobs data sent the ‘Loonie’ soaring, with employment figures for June revealing an increase in the workforce of 45,300 against predictions of a 10,000 increase. This means that in the last two months the Canadian economy has added 100,000 new jobs. The unemployment rate dropped unexpectedly from 6.6% to 6.5%.
GBP/AUD Unable to Benefit from Lack of Australian Ecostats
There was no notable domestic data released for Australia on Friday, yet the GBP/AUD exchange rate still tumbled.
Strong demand for safe-haven currencies on the back of positive Eurozone and US data, as well as bold jobs data making the Canadian Dollar the risky currency of choice, failed to slow the Pound’s slump against the ‘Aussie’.
GBP/NZD Falls despite Empty New Zealand Data Calendar
An empty data calendar and strong demand for other currencies was not enough to keep the Pound above the water on Friday, so GBP/NZD slumped to a fresh nine-day low.
Data Released
09:30 EUR Eurozone Sentix Investor Confidence (JUL)
15:00 USD Labor Market Conditions Index Change (JUN)
20:00 USD Consumer Credit (MAY)
23:45 NZD Card Spending Retail (MoM) (JUN)
23:45 NZD NZ Card Spending (MoM) (JUN)