Latest Productivity Figures Send Pound Sterling Exchange Rates Soaring after ONS Data Reveals Strongest Growth Since 2005

Strong Increase in UK Productivity Boosts Pound Sterling Exchange Rates

Figures showing a strong increase in the productivity of British workers gave the Pound a boost on Friday.

According to the Office for National Statistics (ONS), output per hour of work rose 0.7% in the final three months of 2017.

Combined with the increase seen in the third quarter, the figures showed that productivity had seen its fastest pace of half-year growth since 2005.

Shock German Industrial Production Contraction Boosts GBP/EUR

Poor Eurozone data helped the GBP/EUR exchange rate climb higher on Friday. German industrial production posted a shock -1.6% decline on the month, while the German and Italian retail PMIs fell into contraction territory.

French retail stagnated, leaving the overall Eurozone retail PMI just 0.1 points above the neutral 50 mark that indicates no growth.

Speeches from European Central Bank (ECB) officials Constancio and Praet today could create further volatility for the Euro.

Weak US Labour Market Data Fuels GBP/USD Exchange Rate Recovery

After dropping on Thursday thanks to market expectations of a strong US non-farm payroll report, the GBP/USD exchange rate was able to recover all of its losses on Friday when the data in question disappointed.

Instead of the 185,000 increase expected, the workforce expanded by 103,000, while the unemployment rate held at 4.1% despite economists having pencilled in a drop to 4%.

Below-Forecast Canadian Wage Growth Allows GBP/CAD Exchange Rate to Rebound

The GBP/CAD exchange rate was able to recover Thursday’s losses on Friday, despite strong Canadian jobs growth figures.

While the workforce increased by 32,300 people in March, hourly earnings continued to grow at a rate of 3.1% year-on-year, against expectations of an increase to 3.4%.

This could weigh on the monetary policy outlook, prompting markets to sell the Canadian Dollar.

Canadian housing starts and business outlook surveys could help the Canadian Dollar recover some of Friday’s losses if the results are positive.

GBP/AUD Boosted by Productivity Data; US-China Trade Dispute Softens Australian Dollar

The GBP/AUD exchange rate shot higher on Friday, supported by the latest UK productivity data and the recent tough rhetoric on trade from the United States.

Thursday had seen President Donald Trump calling for tariffs on another US$100 billion worth of Chinese goods, to which China responded by warning that it was ‘already [formulating] very detailed countermeasures’. This helped the Pound to rise even further.

GBP/NZD Advances as New Zealand Fails to Benefit from Soft US Data

The GBP/NZD exchange rate recovered some of last week’s earlier losses on Friday, although the pairing still closed notably lower than the highs struck on Tuesday. The day’s weak US data was not sufficient to provide the ‘Kiwi’ with much of a boost.

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