Update: GBP Climbs vs EUR, USD with PM Theresa May Set to Offer EU More Money for Brexit Negotiations
Pound Sterling (GBP) exchange rates advanced on Friday amid hopes PM Theresa May will break the Brexit deadlock today.
According to Lloyds; ‘There have been further reports that UK PM May is ready to offer the EU more money to allow the negotiations to move to the next stage. Mrs May is likely to remain on topic at a summit of European leaders in Sweden today.’
Sterling was also deriving support from yesterday’s better-than-forecast UK retail sales report.
Today’s Pound Sterling Headlines
Pound rises on UK retail data – Sales record stronger-than-expected growth.
GBP/EUR climbs thanks to empty Eurozone calendar – Mario Draghi speech promises volatility today.
GBP/USD remains stuck at opening levels – Fed hike bets keep the US Dollar firm.
GBP/CAD pushed lower on Canadian data – Manufacturing output betters expectations.
Minor UK Retail Sales Growth Supports Pound Sterling (GBP) Exchange Rates Higher
Pound Sterling (GBP) exchange rates were on fairly strong form yesterday, with markets cheered by a slight rise in UK retail sales when no growth had been forecast.
Economists and representatives from the retail sector warned that the 0.3% increase including fuel was still a weak result, but considering sales had declined -0.7% in September and were expected to grow 0.2%, markets took what they could get.
While a host of policymakers, including Governor Mark Carney, were taking questions at a Bank of England (BoE) event in Liverpool, nothing particularly unsettling was said to derail the Pound’s recovery.
Theresa May is heading to Brussels today in an attempt to break the deadlock in Brexit negotiations. Signs that she is achieving her aim will likely push Pound exchange rates higher.
Sparse Eurozone Data Calendar Helps GBP/EUR Exchange Rate Gain Ground
The Euro slipped lower yesterday, allowing the Pound to make modest gains. Eurozone data was in short supply and what was released offered no reason for markets to flock to buy the common currency.
Finalised Eurozone inflation figures for October remained in line with earlier estimates, while French unemployment and the Italian trade deficit both rose as expected.
As well as Eurozone current account and construction output figures, markets may spend the day reacting to this morning’s speech from European Central Bank (ECB) President Mario Draghi.
GBP/USD Exchange Rate Flat as Tenacious US Dollar Refuses to Budge on Fed Hike Bets
The Pound to US Dollar (GBP/USD) exchange rate was hanging around opening levels yesterday, with the ‘Greenback’ refusing to budge thanks to high bets of a December rate hike.
US data releases offered mixed outcomes, with initial jobless claims figures unexpectedly rising and export prices remaining stagnant, while industrial production grew at almost double the forecast pace.
At this juncture, it would take something major to derail USD as the December monetary policy meeting approaches.
Housing starts and building permits data will be the most influential US releases scheduled for today.
Canadian Manufacturing Growth Pushes GBP/CAD Exchange Rate Lower
Some positive manufacturing data from Canada boosted appetite for the Canadian Dollar and meant that the GBP/CAD exchange rate declined yesterday.
Manufacturing sales had been expected to decline -0.5% on the month in September, but instead grew 0.5%.
Canadian consumer price index figures for October could benefit the GBP/CAD exchange rate, as a slowdown in price growth is forecast, which is likely to spark fears that the Bank of Canada (BOC) has been too quick to raise interest rates.
GBP/AUD Exchange Rate Flat as Pound Sheds Early Gains after Australian Labour Data Disappointment
Poor Australian labour market data released around midnight yesterday gave the Pound an early boost, but by the end of the day GBP/AUD had shed most of its gains and returned to opening levels.
The Australian unemployment change figure showed an increase in the number of people in work of just 3,700, against forecasts for 18,000.
The unemployment rate fell, but only due to a decrease in the number of people actively looking for work. On top of this, long-term consumer expectations for inflation fell.
Falling New Zealand Consumer Confidence Gives GBP/NZD a Boost
The GBP/NZD exchange rate was able to make strong gains yesterday thanks to news of falling New Zealand consumer confidence.
The ANZ consumer confidence index for November weakened -2.1%, falling from 126.3 to 123.7.
Data Affecting Today’s GBP Exchange Rate Forecast
08:30 EUR ECB’s Draghi Speaks in Frankfurt
13:00 EUR Bundesbank’s Weidmann Speaks at European Banking Congress
13:30 CAD Consumer Price Index (YoY) (OCT)
13:30 USD Housing Starts (MoM) (OCT)
13:30 USD Building Permits (MoM) (OCT)