Pound (GBP) to US Dollar to Extend Rally on Upbeat PMIs?
The Pound (GBP) continued to strengthen through Thursday, with the Pound to US Dollar exchange rate recovering its losses. Investors remained bullish towards the UK currency in spite of Brexit concerns and without any clear catalyst.
Meanwhile, Sterling remains on the offensive this morning after the UK’s latest retail sales figures reported sales growth remained robust in July.
Additionally, the publication of the UK’s latest PMI figures this morning revealed a strong expansion in UK business activity. The far stronger-than-expected manufacturing and services data showed growth accelerated at its fastest level in seven years compared.
This improvement in growth could help extend GBP gains and push the Pound to US Dollar exchange rate even higher.
However, the latest round of Brexit trade talks for the week concluded, with EU negotiator Michel Barnier ‘disappointed’ with progress. Added to this, the UK negotiator added there had been ‘little progress’.
This could offset the positive PMI data and weigh on GBP exchange rates.
Euro (EUR) Muted as ECB Split over the Need for More Stimulus
The Euro (EUR) struggled to find support through yesterday’s trading session, following the publication of the minutes from the European Central Bank’s (ECB) latest policy meeting.
These saw the ECB signal that the entirety of its €1.35 trillion Pandemic Emergency Purchase Programme (PEPP) is likely to be expended before the end of the year, but with policymakers split on whether to extend the fund.
Looking ahead, the Euro may look to push higher through today’s session if we see the Eurozone’s latest PMI figures report another boost in economic activity this month.
US Dollar (USD) Strengthens as Disappointing US Unemployment Figures Unnerve Markets
The US Dollar (USD) struck higher again during yesterday’s session, extending Wednesday’s gains as investors continued to flock to the safe-haven ‘Greenback’ in jittery trade.
This was in part spurred by data showing that last week’s US initial jobless claims rose back above 1 million, stoking concerns over the state of the US economic recovery.
However, the Pound to US Dollar exchange rate recovered by the end of the session. Meanwhile, GBP/USD could continue climbing as UK business activity expanded robustly in August.
This uptrend in USD exchange rates may carry through to the end of this week’s session should gloomy market sentiment see investors continue to favour the US Dollar.
Canadian Dollar (CAD) Stable on Positive ADP Employment Report
The Canadian Dollar (CAD) held its ground through Thursday’s trading session as an ADP employment jump of over 1 million in July helped to offset a drop in oil prices.
Meanwhile, the publication of Canada’s retail sales figures may offer a boost to the ‘Loonie’ later this afternoon as economists forecast a bumper surge in sales growth at the end of the second quarter.
Australian Dollar (AUD) Muted Despite Positive Retail Sales Figures
The Australian Dollar (AUD) was left on the back foot overnight on Thursday, with skittish investors continuing to shun the ‘Aussie’ despite a stronger-than-expected print in Australia’s latest retail sales figures.
New Zealand Dollar (NZD) Stabilises on Coronavirus Hopes
After falling sharply through Thursday’s session, the New Zealand Dollar (NZD) was able to temper its losses overnight on hopes that New Zealand will be able to quickly quash its coronavirus resurgence.