Quieter Day of Politics Softens the Pound (GBP)
After a storm of political headwinds swept the Pound (GBP) higher earlier in the week, the relative calm of Friday’s session saw the currency fall foul of some profit taking.
GBP investors also appeared to take stock of the current political landscape, with most observers agreeing a snap election is a case of when not if.
While parliament will face another motion calling for a general election today, the chances of it passing appear extremely slim.
This could leave some room for Sterling to extend its gains this morning if today’s GDP figures print positively.
Gloomy German Data Limits Downside in GBP/EUR Exchange Rate
The continued gloom surrounding Germany’s manufacturing sector helped to cap any losses in the Pound to Euro (GBP/EUR) exchange rate on Friday.
Data published at the end of the week revealed industrial production in Germany contracted for the second month running in July, fuelling fears Europe’s largest economy is at risk of a recession this year.
Looking ahead, the Euro looks certain to be in the spotlight this week as the European Central Bank (ECB) holds its latest policy meeting.
This could infuse some volatility in EUR exchange rates as markets brace for the announcement of the ECB’s ‘substantial’ stimulus package.
GBP/USD Exchange Rate Steady as US Payrolls Miss
The Pound US Dollar (GBP/USD) exchange rate remained rangebound at the end of last week’s session as a disappointing US payroll print failed to inspire confidence in the ‘Greenback’.
The US economy added 130,000 jobs last month, missing expectations of a rise of 158,000 and adding to evidence that domestic growth is starting to slow.
Closing out the week was a speech from Federal Reserve Chair Jerome Powell, who further limited the appeal of USD by hinting at the possibility of more rate cuts.
Coming up this week, the publication of US CPI figures are likely to be high on the agenda for USD investors. The US Dollar could stumble if US inflation drifted lower in August.
Surge in Canadian Employment Undermines GBP/CAD Exchange Rate
The Pound Canadian Dollar (GBP/CAD) exchange rate retreated on Friday, falling roughly half a cent as Canadian employment growth smashed expectations in August.
However, with the majority of the jobs added last month being part time positions and oil prices tumbling back below $60 a barrel, the upside in the ‘Loonie’ proved limited.
GBP/AUD Exchange Rate Tumbles on USD Weakness, Trade Optimism
The Pound to Australian Dollar (GBP/AUD) exchange rate tumbled on Friday, with a slump in the US Dollar and rising optimism about US-China trade talks prompting markets to go risk-on.
GBP/NZD Exchange Rate Slumps on Improved Risk Sentiment
The Pound to New Zealand Dollar (GBP/NZD) exchange rate also plummeted sharply at the end of last week’s session, tumbling over a cent as improved risk sentiment carried the ‘Kiwi’ higher.