The Pound (GBP) stumbled again yesterday against the other majors following a worse than expected Construction PMI.
IHS Markit reported that the UK’s construction industry slowed last month, with activity falling from 52.5 to 52.2 – a faster rate than the decline initially forecast, with analysts predicting that the sector may continue struggling over the rest of 2017.
Sterling could plummet again later this morning if the Services PMI also fails to impress as it would likely prompt fears that the UK economy is finally beginning to feel the pressure of Brexit.
The Pound Euro (GBP EUR) exchange rate fell by around half a cent from its best levels on Tuesday as investors welcomed the uptick in Eurozone Retail Sales.
Sales surged from an upwardly revised 0.1% to 0.7% in February, sailing past initial expectations that they would rise to 0.5% as they were buoyed by strong consumer spending in Germany and France.
The single currency did retreat slightly this morning however as the Eurozone’s services PMI fell slightly short of expectations, rising from 56.0 to 56.4 after initial forecasts it would reach 56.7, but still reaching a six-year high.
Sterling also sank by around half a cent against the US Dollar (USD) yesterday as markets flocked to ‘safe haven’ currencies like the ‘Greenback’ due to growing political uncertainty in the Eurozone and the UK thanks to the French election and Brexit.
The US Dollar was also bolstered by a strong trade report from the US, with the country’s trade deficit narrowing from -$48.8bn to -$43.6bn in February.
However USD may be forced to cede ground later this afternoon as analysts predict that the latest US Non-Manufacturing PMI will slide from 57.6 to 57.0.
The Pound Canadian Dollar (CAD) exchange rate fluctuated during yesterday’s trading session as Sterling initial fall following the UK’s construction PMI was reversed in the early afternoon as Canada unexpectedly printed a trade deficit in February.
However the pairing quickly plummeted again as the ‘Loonie’ was bolstered by an uptick in oil prices amid concerns of a supply shortage from the UK’s North Sea.
Sterling slumped against the Australian Dollar (AUD) again during overnight trading on Tuesday as markets reacted positively to Australia’s latest Services Index, with the sector showing growth again in March after unexpectedly contracting the month before.
New Zealand Dollar
The Pound New Zealand Dollar (GBP NZD) exchange rate fluctuated violently yesterday, with the ‘Kiwi’ failing to gain despite dairy prices rising by 1.6% at the latest auction as market attitudes shifted to become more risk adverse.
This week the US Dollar was touching three-year highs when valued against a basket of major currencies. The greenback’s traditional role as one of the safe-haven currencies is helped by a domestic economy that is largely immune to the threats of the coronavirus.
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