Pound Sterling Boosted by Strong UK Data
Friday’s slew of UK data is overwhelmingly positive, allowing the Pound to gain sharply versus its major peers.
Industrial production printed in line with forecasts, while manufacturing production beat expectations.
The trade deficit narrowed marginally instead of widening and the latest GDP estimate from the National Institute of Economic and Social Research (NIESR) rose from 0.2% to 0.4%.
There is no UK data set for release today, leaving markets to focus on tomorrow’s upcoming consumer price data for August.
Pound Gains Nearly One Cent versus Euro
The Pound was able to gain sharply against the Euro at the end of last week as UK data exceeded expectations and Eurozone data disappointed.
Significantly below forecast export growth for Germany resulted in the country’s trade balance narrowing sharply from €22.3 billion to €19.5 billion instead of to €21 billion as expected.
Exports had grown just 0.2% in July, compared to forecasts of 1.3% growth after contracting -2.7% in June.
Pound US Dollar Ends Week Higher on Hurricane Irma Fears
Some positive data and some more confident comments from members of the Federal Open Market Committee (FOMC) on Friday failed to buoy the US Dollar.
The outlook for interest rates remains gloomy and Hurricane Irma was fast approaching, so there was little incentive for markets to buy into the ‘Greenback’.
This allowed the Pound to continue the general uptrend seen throughout the week, with GBP/USD closing Friday almost three cents higher than Monday’s opening levels.
The only impactful US data on the calendar today will be the New York Fed survey of consumer expectations. Signs that consumers are expecting greater inflation may help improve sentiment towards the US Dollar.
Strong Canadian Labour Market Data Fails to Undermine GBP/CAD
On the face of it, Canada’s latest labour market data impressed. Over 22,000 people entered the workforce in August, beating expectations of an uptick from 11,000 to 15,000.
This unexpectedly pushed the unemployment rate down from 6.3% to 6.2%. However, a closer look at the data revealed that this shift in employment was due to a surge in part-time work, with the number of people in full-time employment having fallen by nearly -0,000.
This allowed GBP/CAD to recover some of the week’s earlier losses.
Canadian housing starts data is set for release this afternoon.
Pound to Australian Dollar Ends Higher on Strong UK Data
The Pound was able to recover all of last week’s losses and even record some minor gains on Friday on the back of the strong UK data released in the morning.
This was despite the fact that the weak US Dollar was boosting demand for the riskier Australian Dollar, which was also supported by better than forecast home loans data for July. Loans were expected to grow 1%, but instead climbed by 2.9%.
There is no Australian data set for release today, but the ANZ Roy Morgan consumer confidence index for the week ending September 10 will be released just after midnight tomorrow.
GBP/NZD Recovers Week’s Losses
The Pound was able to advance sharply against the New Zealand Dollar on Friday, erasing the week’s losses.
This was despite strong manufacturing data released late on Thursday night. Manufacturing activity grew 2.8% in the first quarter, but accelerated to 3.9% during the second quarter.
The only New Zealand data set for release today is the ANZ truckometer for August. This documents haulage activity, so could suggest an uptick in economic activity if the roads are proven to have been busy last month.
Data Released Today
16:00 USD New York Fed Survey of Consumer Expectations
23:00 NZD ANZ Truckometer Heavy (MoM) (AUG)