Pound Sterling (GBP) Softens on Weak Manufacturing PMI
The Pound (GBP) got off to a poor start this week with the currency slipping against the majority of its peers in the wake of a lacklustre UK manufacturing PMI.
IHS Markit reported that growth in the UK’s factory sector suffered its first contraction since July 2016 in May, as Brexit and trade related jitters slashed new orders in the sector.
The release of the UK’s construction PMI later this morning is unlikely to reverse Sterling’s fortunes either, with economists forecasting that the sector will have stagnated again last month.
GBP/EUR Exchange Rate
The Pound Euro (GBP/EUR) exchange rate weakened on Monday
Looking ahead, we have the release of the Eurozone’s latest CPI figures later this morning, with the Euro potentially giving up some ground if inflation in the bloc slowed as forecast in May.
GBP/USD Exchange Rate Steady Following US PMI Figures
The Pound US Dollar (GBP/USD) exchange rate was prevented from sliding yesterday as the US published its own factory PMI.
The ISM Manufacturing PMI was reported to have fallen from 52.8 to 52.1 in May – the index’s lowest reading since October 2016 – which prompted speculation that Trump’s trade war may be hurting demand.
Coming up later today, we have a speech by Federal Reserve Chair Jerome Powell who could shed some light on the bank’s policy outlook, potentially lending some support to the US Dollar if he dismisses recent rate cut speculation.
GBP/CAD Exchange Rate Steady as Oil Prices Plummet
The Pound Canadian Dollar (GBP/CAD) exchange rate traded in a narrow range on Monday, with the oil-sensitive ‘Loonie’ unable to take advantage of the slide in Sterling as it was undermined by a 5% slump in Brent crude prices.
GBP/AUD Exchange Rate Steady as RBA Cuts Rates
The Pound Australian Dollar (GBP/AUD) exchange rate remained relatively flat overnight on Monday, with the Reserve Bank of Australia’s (RBA) decision to lower interest rates to a historic low of 1.25% not having much of an impact on the ‘Aussie’ as the move had already been priced in by markets.
The focus for AUD investors will now turn to tonight’s domestic GDP report, with the Australian Dollar potentially finding some support if growth accelerated in line with expectations in the first quarter.
GBP/NZD Exchange Rate Rebounds from Two-Month Low
After falling to a two-month low on Monday, the Pound to New Zealand Dollar (GBP/NZD) exchange rate began to mount a recovery overnight as the pairing moved into oversold territory.