The Pound (GBP) made strong gains last Friday as continuing Bank of England (BoE) rate speculation caused markets to look upon the UK currency favourably.
So far this week Sterling appears to be holding steady against the majority of its peers as investors await the first bits of economic data from Europe.
However with a lull in UK data until tomorrow’s inflation figures, the Pound may be forced to cede some ground if other economies post any upbeat data later today.
The Pound Euro (GBP EUR) exchange rate is flat this morning as investors await the release of the Eurozone’s final Consumer Price Index.
Economists forecast that June’s data will show that inflation fell from initial estimates of 1.4% to 1.3%, likely causing the single currency to stumble as it further erodes any chance of the European Central Bank (ECB) voting to tighten monetary policy when it meets later this week.
Sterling struck a new ten-month high against the US Dollar (USD) last Friday as the combination of BoE rate speculation and weak US inflation data helped propel the pairing over half a cent higher.
The ‘Greenback’ was also weakened by the latest US retail figures, with sales slumping from -0.1% to -0.2% last month despite expectations consumer spending would rise to 0.1%.
Meanwhile the US Dollar may post further losses this afternoon with the latest NY Empire State Manufacturing Index expected to dip from 19.8 to 15 this month as manufacturing activity in the state normalises after rocketing higher in June.
Despite taking a hit last Wednesday after the Bank of Canada (BoC) voted to raise interest rates, the Pound Canadian Dollar (GBP CAD) exchange rate made a steady recovery by the end of the week’s session thanks to optimism that the BoE will tighten its own monetary policy in the near future.
However with oil prices continuing to climb on signs of slowing US shale output the ‘Loonie’ may find itself pushing higher as the day goes on.
Sterling slumped to a new three-week low against the Australian Dollar (AUD) on Friday as the ‘Aussie’ was bolstered by rising commodity prices and an uptick in risk appetite amongst investors.
New Zealand Dollar
The Pound New Zealand Dollar (GBP NZD) exchange rate was able to build on the gains made at the end of last week in early trade this morning as the ‘Kiwi’ was pressured by a dip in New Zealand’s latest Services PMI as it fell from 58.8 to 58.6 in June.
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