ONS Report Weakens Pound Sterling Exchange Rates after Revealing Six-Year Low Rate of Household Spending

Pound Sterling Falls after ONS Warns of Slowest Pace of Household Spending Growth Since 2011

Despite a run of largely positive data on Thursday, Pound Sterling was left to decline after the Office for National Statistics (ONS) revealed that household spending grew at the slowest rate in six years during 2017.

This, just a day after the Bank of England (BoE) released a report warning that weak consumer spending was beginning to create signs of ‘financial distress’ in the retail sector, added further gloom to the UK’s economic outlook.

The UK manufacturing PMI for March could weaken the Pound today, given that economists are expecting a decline in the index.

GBP/EUR Exchange Rate Fall Continues Despite Unexpected German CPI Slowdown

The GBP/EUR exchange rate slipped lower on Thursday, despite some disappointing German consumer price index figures being released at midday. While the German unemployment change figure for March showed a better-than-expected -19,000 person decline in the number of jobless, inflation data showed an unexpected month-on-month slowdown from 0.5% to 0.4%.

This takes price growth in the Eurozone’s powerhouse economy even further from the European Central Bank’s (ECB) target range, lowering the odds of hawkish monetary policy adjustments in the near future.

Markets Disappointed by Latest US Data, but GBP/USD Exchange Rate Weakens

A run of largely disappointing US data was insufficient to prevent the GBP/USD exchange rate from edging below opening levels on Thursday. Real personal spending was shown to have stagnated during February, while the Chicago purchasing managers index and University of Michigan sentiment index both fell on previous readings.

Even a 45-year low for initial jobless claims didn’t provide much boost for the US Dollar, with the ‘Greenback’ softening against many of its peers even if it did gain against the Pound.

GBP/CAD Drops despite Unexpected Contraction in Canadian GDP

An unexpected shrinking of the Canadian economy on the month during January failed to dent the Canadian Dollar on Thursday and the GBP/CAD exchange rate fell by around half a percent.

Data showed that the economy contracted -0.1% at the beginning of the year, although year-on-year GDP for December was raised to 3.4%. Weakness in the US Dollar, Euro and Pound Sterling helped to keep demand for the more risky Canadian Dollar afloat.

Risk Appetite Undermines GBP/AUD Exchange Rate as Australian Dollar Demand Surges

The GBP/AUD exchange rate was also down nearly half a percent on Thursday as market risk appetite picked up. The Australian Dollar was also given a minor boost by the latest private sector credit figures, which showed a stronger-than-expected 0.4% month-on-month increase in February. Higher business borrowing could point to stronger growth, employment and wages further down the line.

GBP/NZD Exchange Rate Slips even as Global Risk Appetite Increase Fails to Boost New Zealand Dollar

The New Zealand Dollar wasn’t performing as well as its commodity brethren on Thursday, yet despite slumps virtually across the board for the ‘Kiwi’ it was the GBP/NZD exchange rate that weakened.

Laura Parsons

Laura has been working in the financial services sector since 2012 and provides currency news updates for a number of online and print publications. Over the years she has produced exchange rate analysis for publishers like French Property News, The Express, The Telegraph and Forbes.

Contact Laura Parsons