First July Surplus in 15 Years Not Enough to Lift Pound
The Pound remained under siege yesterday despite a couple of upbeat ecostats.
Data showed that for the first time in 15 years, the month of July saw a budget surplus. Beating forecasts of a -£1 billion deficit, the Office for National Statistics’ latest figures showed that the government ran a budget surplus of £0.184 billion last month. The figure was bolstered by an £8 billion self-assessment intake, which was up £0.8 billion on July 2016, and represented the best month of July tax returns since records began in 1999.
However, despite the sanguine print, cumulative borrowing remained up 9% on this time last year, which prevented Sterling registering any meaningful gains. The latest factory output survey also came in better-than-anticipated without boosting the Pound.
Pound to Euro Exchange Rate Strikes New 10-Month Low
The Pound to Euro exchange rate touched a new 10-month low yesterday, the fifth time it has done so in the past six days of trading.
Investors largely ignored the surprise UK July budget surplus, just as they paid little heed to the Confederation of British Industry’s latest industrial trends survey. The CBI report showed a +13% score for new orders, significantly higher than the long-term average of -14%. Export growth also appeared buoyant, with firms stating they were confident of sturdy demand over the coming months. Nevertheless, GBP/EUR tumbled by around a quarter of a cent on the day as Brexit uncertainties continued to weigh on UK economic sentiment, and therefore Bank of England policy expectations.
Pound to US Dollar Exchange Slides to 40-Day Low
‘Cable’ plunged to a 40-day low yesterday as Brexit uncertainties lingered. Traders still don’t know when negotiations between Britain and the EU will start focussing on the future trading relationship between the two, and the longer markets are left in the cold, the more pessimistic they are turning on the prospect of a positive outcome.
The ‘Greenback’ appreciated broadly across the board, not due to any notable positive domestic indicators but rather due to a lack of any perceived negative developments in stories surrounding the White House.
The ‘Greenback’ suffered last week on rumours that Trump’s chief economic advisor Gary Cohn was planning to resign in reaction to the President’s troubling response to the recent riots in Charlottesville. However, Cohn remains in the White House and this has cheered holders of the US Dollar because the former Goldman Sachs banker is seen as the last vestige of hope for Trump’s pro-growth economic plan.
Pound to Canadian Dollar Exchange Rate Sinks to 7-Month Low on Retail Sales Print
The Pound to Canadian Dollar exchange rate plunged to its lowest level since January yesterday, plummeting -80 pips as upbeat Canadian retail numbers bolstered the appeal of the North American currency.
The ‘Loonie’ rocketed higher versus Sterling during the afternoon following a report showing that, excluding auto sales and gasoline, Canadian retail sales grew 1.1% in June.
Pound to Australian Dollar Exchange Rate Hits New 5-Month Low
Sterling touched a fresh five-month low against the Australian Dollar yesterday as markets all over the world continued to push the Pound lower due to concerns over Britain’s outlook for trade, growth and monetary policy.
Pound to New Zealand Dollar Exchange Rate Holds Flat
The Pound to New Zealand Dollar exchange held relatively flat on the day yesterday as upbeat British data was overshadowed by sour market sentiment towards the UK economy and currency.
Data Released Today
14:05 USD Fed’s Kaplan Speaks to Oil Group in Midland, Texas (Low)
15:00 EUR Eurozone Consumer Confidence (AUG A) (Medium)
23:45 NZD Trade Balance (New Zealand dollars) (JUL) (Medium)