The Pound (GBP) tumbled against the majority of its peers yesterday following the release of the UK’s latest Construction PMI.
While only accounting for a small amount of UK economic growth, investors were concerned by the construction sector’s unexpected contraction in September.
Meanwhile, the UK will release September’s Services PMI later this morning, with Sterling likely to plummet if it also disappoints.
The Pound Euro (GBP EUR) exchange rate fell by around half a cent on Tuesday as markets shied away from Sterling following the release of the UK’s lacklustre construction PMI.
Also weighing on the pairing yesterday was a vote by MEPs urging EU officials to not begin Brexit trade talks with the UK unless a ‘major breakthrough’ is made.
Meanwhile, the single currency may advance again later this morning with the release of the Eurozone’s latest Retail Sales figures, with economists forecasting that sales will have rebounded in August after declining by 0.3% in July.
Sterling slumped to a new two-week low against the US Dollar (USD) yesterday, with investors fearing that the fall in business construction activity could have wider implications for the UK economy.
The ‘Greenback’ also found further gains on Tuesday following a speech by Federal Reserve Governor Jerome Powell as he cited the importance of speeding up growth, something that investors would welcome if he is granted the top job at the bank next, as some rumours suggest he will.
The US Dollar may continue to push higher this afternoon as well, with the US Services PMI expected to have risen slightly in September.
The Pound Canadian Dollar (GBP CAD) exchange rate also fell in the wake of the UK’s latest PMI data yesterday, however the ‘Loonie’s gains were tempered somewhat by another downturn in oil prices as Brent crude fell to $55.78 a barrel, scuppering hopes that the recent rally would have helped push prices back over $60
Concerns that Brexit trade talks may be delayed pushed Sterling around a cent lower against the Australian Dollar (AUD) on Tuesday, with MEPs also suggesting that a division in the UK government were hampering efforts to make progress in talks.
New Zealand Dollar
The Pound New Zealand Dollar (GBP NZD) exchange rate fluctuated yesterday as the UK’s lacklustre construction PMI was offset by a 2.4% fall in dairy prices at the latest global dairy auction.
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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