Surging Wage Growth Fails to Inspire the Pound (GBP)
The Pound (GBP) was left rangebound on Tuesday in spite of the UK’s latest employment figures revealing domestic wage growth rocketed up to an 11-year high in June.
This muted reaction in Sterling was likely due to the accompanying rise in the UK unemployment rate, on top of the continued Brexit malaise which continues to drag on the currency.
Today’s UK CPI figures could limit the appeal of the Pound if we see inflation slow in July as expected.
GBP/EUR Exchange Rate Steady as German Economy Contracts
The Pound to Euro (GBP/EUR) exchange rate was left adrift yesterday, with investors also shying away from the single currency after Eurozone economic sentiment plummeted in August.
However, the focus has quickly shifted to the publication of Germany’s GDP figures this morning, where it was confirmed that the Eurozone’s largest economy shrank in the second quarter.
This has left the Euro on the back foot as analysts speculate Europe’s powerhouse economy could be barrelling towards a recession this year.
GBP/USD Exchange Rate Muted as US Core Inflation Accelerates
The Pound to US Dollar (GBP/USD) exchange rate was also left trading in a narrow range on Tuesday in the wake of the latest US CPI figures.
While core inflation in the US climbed to a six-month high last month, the ‘Greenback’ displayed little response to the data.
In the absence of any notable US economic data today, US Dollar momentum is likely to be dictated by market risk appetite.
Rebound in Oil Prices Undermines GBP/CAD Exchange Rate
The Pound to Canadian Dollar (GBP/CAD) exchange rate initially accelerated yesterday as the ‘Loonie’ was sold off in the face of softening risk appetite.
However, this uptrend came to an abrupt halt in the afternoon, with a strong rebound in crude prices helping the oil-sensitive Canadian Dollar to mount a recovery.
GBP/AUD Exchange Rate Retreats on Trade Optimism
The Pound Australian Dollar (GBP/AUD) exchange rate fell back yesterday, relinquishing most of the gains made at the start of the week as the ‘Aussie’ was buoyed by the news that the US would delay some of its tariffs on China until December.
These gains were then shored up by the publication of Australia’s wage price index as domestic wage growth exceeded expectations in the second quarter.
GBP/NZD Exchange Rate Slips as Risk Appetite Improves
The Pound to New Zealand Dollar (GBP/NZD) exchange rate also fell back yesterday as the appeal of the risk-sensitive ‘Kiwi’ was boosted by the easing of trade tensions between the US and China.