Brexit Concerns Weigh on Pound Sterling (GBP) Exchange Rates
The Pound (GBP) fell back against the majority of its peers yesterday, driven lower by persistent political uncertainty and Brexit jitters.
Further weighing on Sterling sentiment was speculation of a dovish shift in the Bank of England (BoE).
In the spotlight today will be the release of the UK’s latest employment figures, with the Pound potentially rising if wage growth accelerated in May as suspected.
GBP/EUR Exchange Rate Losses Trimmed by ECB Speculation
Whilst the Pound to Euro (GBP/EUR) exchange rate drifted lower on Monday, the single currency struggled in wider trade as it was pressured by speculation regarding the European Central Bank (ECB).
The ECB has grown increasingly pessimistic in its outlook this year, leading to rising expectations that the bank will be forced to inject fresh stimulus into the Eurozone by the end of the year, either through restarting its quantitative easing programme or by cutting rates.
Looking ahead, the Euro may be forced to retreat this morning as economists forecast that economic sentiment in the Eurozone weakened again this month.
GBP/USD Exchange Rate Slumps as Empire State Manufacturing Rebounds
The Pound to US Dollar (GBP/USD) exchange rate got off to a poor start this week, with the pairing falling around half a cent as the latest Empire State manufacturing index came in better than expected this month.
The Federal Reserve Bank of New York reported that the index bounced back from -8.6 to 4.3 in July, slightly ahead of expectations and the largest turnaround in growth in two years.
Coming up later this afternoon we have the release of the latest US retail sales figures, which could result in the US Dollar moving lower if domestic sales growth slowed last month as expected.
GBP/CAD Exchange Rate Slumps as Oil Prices Climb
The Pound to Canadian Dollar (GBP/CAD) exchange rate fell back on Monday, with the oil-sensitive ‘Loonie’ able to take full advantage of a weakened Sterling as crude prices pushed higher again, with WTI crude nearing $61 a barrel after rising Chinese industrial production bolstered expectations for continued demand.
GBP/AUD Exchange Rate Flat Following Dovish RBA Minutes
After falling yesterday on the back of some upbeat Chinese data, the Pound to Australian Dollar (GBP/AUD) exchange rate held at six-month low overnight as AUD investors digested the minutes from the Reserve Bank of Australia’s (RBA) policy meeting earlier this month. The minutes made it clear that the bank would be willing to cut rates for a third time this year if needed.
GBP/NZD Exchange Rate Slides as NZ Inflation Accelerates
The Pound to New Zealand Dollar (GBP/NZD) exchange rate has fallen roughly two cents so far this week, with NZD exchange rates boosted by rising risk sentiment and a jump in domestic inflation in the second quarter.
Meanwhile we may see the ‘Kiwi’ continue to strengthen later this afternoon if dairy prices begin to rise again today after falling over the last two months.
Data Releases
09:30 GBP Unemployment Rate (May)
09:30 GBP Wage Growth (May)
10:00 EUR ZEW Economic Sentiment Index (Jul)
13:30 USD Retail Sales (Jun)
14:15 USD Industrial Production (Jun)
15:30 NZD Global Dairy Auction