Pound Sterling (GBP) Exchange Rates Undermined as Consumer Spending Slows
Pound Sterling (GBP) exchange rates moved away from the week’s best levels on Friday following the release of less-than-spectacular UK retail sales figures.
Retail sales including fuel were down -1.5% on the month and came in at 1.4% on the year (vs. forecasts for -0.9% and 2.6%) while sales excluding fuel tumbled -1.6% on the month and printed at 1.3% on the year. Sales were expected to come in at -1.0% MoM and 2.6% YoY. Figures for December were also negatively revised.
Markit economist Chris Williamson said of the results: ‘The data add to signs that rising prices and stubbornly weak pay growth continue to erode consumer spending power and will act as a drag on the economy in 2018.’
However, on Monday the Pound recovered last week’s losses and registered modest gains against most of the majors.
There’s no UK data to look out for today, but tomorrow’s public sector net borrowing report could spark GBP movement.
Pound Sterling to Euro (GBP/EUR) Exchange Rates Sturdy before ZEW Surveys
After sliding a little on Friday in response to the UK’s retail sales data, the Pound Sterling to Euro (GBP/EUR) exchange rate stabilised on Monday.
The pairing could dip tomorrow if German and Eurozone ZEW economic sentiment surveys show improvement.
Germany’s ZEW current situation survey is forecast to strengthen from 89.3 to 89.5, and the expectations index is believed to have risen from 17.4 to 17.9.
The Eurozone’s consumer confidence measure, meanwhile, is expected to edge up from 0.5 to 0.6.
US Dollar (USD) Exchange Rates Edged Lower on Sliding Confidence, Government Shutdown
US Dollar (USD) exchange rates slipped before the weekend as the University of Michigan sentiment measure slid from 95.9 to 94.4. Economists had expected it to rise to 97.0.
Similarly, the current conditions gauge weakened from 113.8 to 109.2, far below predictions for a reading of 114.4.
The expectations index did improve, rising from 84.3 to 84.8, but failed to reach the forecast figure of 85.3.
The US government shutdown has also put US Dollar exchange rates under pressure.
The Senate will be voting on whether to end the shutdown later today.
Canadian Dollar (CAD) Exchange Rates Up from Worst Levels on Manufacturing Data
After struggling for much of the week, Canadian Dollar (CAD) exchange rates received a little boost on Friday as domestic manufacturing sales data impressed.
Although the figure for October was negatively revised, November’s result of 3.4% smashed the 2.0% forecast.
With both Canadian retail sales and inflation data due out later this week, ‘Loonie’ volatility is likely.
Australian Dollar (AUD) Exchange Rates End Week Higher
The Australian Dollar closed out last week trading higher against the US Dollar and Euro, but little changed against the Pound.
Although Australia’s latest employment figures showed an unexpected increase in the unemployment rate, the ‘Aussie’ derived support from the fact that the nation added an impressive number of positions.
With no influential Australian data to look out for today, AUD movement may be limited.
New Zealand Dollar (NZD) Exchange Rate Fluctuations Expected on Services Stats
While global developments and risk appetite will be driving much of the movement in New Zealand Dollar (NZD) exchange rates this week, the currency is also expected to respond to domestic inflation figures and New Zealand’s performance of services index.
The services index, due out later today, came in at 56.4 in November. Another sturdy result would be NZD-supportive.
While global developments and risk appetite will be driving much of the movement in New Zealand Dollar (NZD) exchange rates this week, the currency is also expected to respond to domestic inflation figures and New Zealand’s performance of services index.
The services index, due out later today, came in at 56.4 in November. Another sturdy result would be NZD-supportive.