Pound Sterling (GBP) Weakened by ‘Dreadful’ Construction PMI
The Pound (GBP) was left on the back foot yesterday as markets reacted to the UK’s latest construction PMI.
IHS Markit reported that Brexit uncertainty resulted in the construction sector suffering its worst decline in growth in a decade last month, and the result dragged on Sterling sentiment.
Adding to these losses were comments from the Bank of England’s Mark Carney, who warned that concerns over the global economy could result in policy changes.
Coming up this morning we have the publication of the last of the UK’s PMI figures for June, with GBP exchange rates likely to face further pressure if the dominant service sector also disappointed last month.
GBP/EUR Exchange Rate Losses Trimmed by Tariff Threat
Whilst the Pound Euro (GBP/EUR) exchange rate softened on Tuesday, the pairing’s losses were trimmed somewhat as EUR investors were spooked by the news that the US was considering tariffs against the EU over accusations the bloc is unfairly subsidizing Airbus.
Further limiting the appeal of the single currency was the ongoing speculation over who will take over a number of top posts within the EU, including who will be the next president of the European Central Bank (ECB).
Meanwhile, the Euro might be knocked this morning if the Eurozone’s services PMI falls short of preliminary readings.
GBP/USD Exchange Rate Slumps on Safe-Haven Demand
The Pound US Dollar (GBP/USD) exchange rate fell around half a cent on Tuesday as rising safe-haven demand saw investors flock to the ‘Greenback’.
This comes as optimism over the US-China trade truce was offset by the White House’s threat to impose tariffs on the EU.
In focus for USD investors today will be the latest ISM non-manufacturing PMI, which could send the US Dollar lower if growth in the US service sector slowed as expected last month.
GBP/CAD Exchange Rate Slips ahead of OPEC Meeting
The Pound Canadian Dollar (GBP/CAD) exchange rate drifted lower throughout yesterday’s session, with the oil-sensitive ‘Loonie’ finding support ahead of today’s OPEC meeting on the expectation that the oil cartel and its allies will announce plans to extend crude production cuts.
GBP/AUD Exchange Rate Sinks on Record Trade Surplus
After falling around half a cent during the European session, the Pound to Australian Dollar (GBP/AUD) exchange rate continued to retreat overnight as data revealed that Australia recorded its highest trade surplus on record in May.
Looking ahead, the ‘Aussie’ may continue to rally overnight as Australia’s latest retail sales figures are expected to report that sales returned to growth in May.
GBP/NZD Exchange Rate Down on Better-than-Expected Dairy Prices
The Pound to New Zealand Dollar (GBP/NZD) exchange rate also neared a five-month low overnight on Tuesday as the ‘Kiwi’ was given a leg up by a better-than-expected result from the latest global dairy auction.