Pound Sterling Rises Ahead of UK Manufacturing PMI Report
Month-end trading requirements allowed the Pound to appreciate against a raft of its major currency peers yesterday afternoon. The move higher in Sterling came just before the 4pm London fix, indicating that it was a case of investors settling positions rather than a result of any fundamental shift in market sentiment.
The main point of interest for Sterling traders during today’s session is the UK manufacturing PMI report, which is tipped to see factory output inch up from 54.3 in June to 54.5 in July. No large fluctuations are expected. However, we could see the Pound rally on a score above 55.0, or witness Sterling sink on a print below 54.0.
Pound to Euro Exchange Rate Flat as Eurozone Unemployment Falls but Inflation Stalls
The Pound to Euro exchange rate remained relatively flat yesterday despite a couple of interesting ecostats out of the Eurozone.
Eurostat reported that unemployment in the currency bloc tumbled from 9.2% to a fresh eight-year low of 9.1% in June.
However, analysts took a sober approach to the figure, concluding that a jobless rate of over 9% was still extremely high and would probably not make much of a difference when it comes to policymakers setting monetary policy at the European Central Bank. After all, 9.1% is more than 4.5% (UK) and 4.4% (US) put together.
The Eurozone consumer price index printed at 1.3%, matching market expectations, but still well below the ECB’s 2.0% target and therefore not sufficient to bring about a rise in demand for the single currency.
Pound to US Dollar Exchange Rate Hits New 10-Month High
Sterling surged over half a cent yesterday afternoon to strike a fresh 10-month high against the US Dollar on month-end trading flows.
We could see ‘Cable’ push ahead today if UK manufacturing prints positively, however, it is more likely that GBP/USD will give back some of its recent gains as profit-taking stances take hold. In the US data is expected to show that ISM manufacturing output slowed from 57.8 to 56.4 in July, while the personal consumption expenditure core gauge of inflation is likely to remain at 1.4%.
Pound to Canadian Dollar Exchange Rate Strengthens 120 Pips
The Pound to Canadian Dollar exchange rate leaped higher by around 120 pips yesterday to hit its highest level in a fortnight.
The commodity-sensitive ‘Loonie’ appeared to fall out of favour with investors during the afternoon as data hit newswires showing that OPEC crude output rose by 90,000 barrels a day during July. Oil prices declined, taking the Canadian Dollar down with them.
Pound to Australian Dollar Exchange Rate Up 70 Pips
Sterling registered a two-week high against the Australian Dollar yesterday, jumping 70 pips during the afternoon as investors settled month-end positions. However, some analysts believe that markets are underplaying the potential for the Reserve Bank of Australia to hike interest rates this year and posit that GBP/AUD is likely to soften during August.
Pound to New Zealand Dollar Rises 120 Pips Ahead of NZ Unemployment Report
Sterling’s month-end gains continued against the New Zealand Dollar yesterday, with GBP/NZD appreciating by around 120 pips to hit an 11-day high. However, we could see the ‘Kiwi’ Dollar progress against the Pound later today if the latest dairy auction sees a rise in payout to New Zealand farmers. The ‘Kiwi’ could also benefit from the second quarter labour market report, which is tipped to see unemployment slide from 4.9% to 4.8%.
Data Released
GBP Markit UK PMI Manufacturing SA (JUL)
EUR Euro-Zone Gross Domestic Product s.a. (QoQ) (2Q A)
USD Personal Consumption Expenditure Core (YoY) (JUN)
CAD Markit Canada Manufacturing PMI (JUL)
USD ISM Manufacturing (JUL)
NZD Employment Change (YoY) (2Q)