The Pound (GBP) tumbled against the majority of its peers yesterday following a report from the Institute of Fiscal Studies (IFS) suggesting that the UK faces two ‘lost decades’ of earnings growth.
However Sterling began to mount a recovery at the start of the European session this morning as investors appear slightly more upbeat ahead of Theresa May’s visit to Brussels for a European summit meeting.
While the summit will be mainly focused on Eastern Europe and the threat of Russia interference on domestic issues, May will also be holding a short meeting with European Council President Donald Tusk to discuss Brexit.
The Pound Euro (GBP EUR) exchange rate fell by around half a cent on Thursday as the IFS forecasts caused markets to sour on the pairing.
At the same time the appeal of single currency was bolstered yesterday following some impressive Eurozone PMI’s, with the bloc’s manufacturing sector showing a particularly strong rise in activity this month, reaching its highest levels in 17 years.
Sterling was able to hold relatively steady against the US Dollar (USD) yesterday as concerns over the IFS forecasts were offset by holiday thinned trade in the US.
USD investors also remained wary of the US currency on Thursday after the Federal Reserve’s minutes on Wednesday confirmed the bank’s cautious view on domestic inflation.
The ‘Greenback’ may be able to recoup some of the week’s losses later this afternoon however, with the release of the latest US manufacturing PMI as economists forecast that activity will have risen slightly this month.
After initially tumbling yesterday morning the Pound Canadian Dollar (GBP CAD) exchange rate was able to rally in the afternoon, recoup almost all of the day’s losses as Canada’s retail sales growth failed to live up to expectations only showing a modest rise from -0.1% to 0.1% in September, well below forecasts that growth would reach 0.9%.
Sterling is mounting a notable recovery against the Australian Dollar (AUD) this morning, rallying over half a cent on hopes that Theresa May’s visit to Brussels will help to deliver some progress in Brexit negotiations.
New Zealand Dollar
The Pound New Zealand Dollar (GBP NZD) exchange rate is making a tentative push higher this morning, with Sterling’s gains being tempered somewhat by New Zealand’s latest trade figures which showed that the trade deficit narrowed in October.
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