After soaring in response to the Conservative’s decisive election victory the pound quickly began shedding ground through Friday’s session.
- Soft UK retail sales leave GBP under pressure
- Euro benefits as Germany defies recession forecasts
- Rising jobless claims dent US dollar
Pound under pressure after underwhelming retail data
The mood towards the pound soured in the wake of a disappointing set of UK retail sales figures.
As sales excluding auto fuel unexpectedly fell -0.3% on the month in October this suggested that consumer confidence took a hit at the start of the fourth quarter.
Given that strong levels of consumer spending had helped to shore up economic growth in previous quarters this weaker showing limited the potential for GBP exchange rate gains.
With political uncertainty set to hang over the UK for the foreseeable future the pound could remain on a weaker footing today.
Widened Eurozone trade surplus could lend the euro support
An unexpectedly positive German gross domestic product report saw the euro recovering some of its lost ground yesterday.
Investors were relieved by the news that the Eurozone’s powerhouse economy had narrowly escaped falling into a technical recession, even though underlying growth remains muted.
Further support could be in store for EUR exchange rates this morning if September’s Eurozone trade surplus widens as forecast.
Evidence that the currency union is largely shrugging off lingering global trade tensions could help the euro edge higher.
Signs of manufacturing resilience forecast to support US dollar
As initial jobless claims increased on the week the potential for US dollar gains was limited yesterday.
With the US labour market struggling to tighten further the case for future Federal Reserve policy action remains, to the detriment of USD exchange rates.
However, USD could find a rallying point this afternoon on the back of November’s empire state manufacturing index if it shows an increase in output.
Friday, 15th November 2019
10:00 EUR Eurozone Trade Balance
13:30 USD Empire State Manufacturing Index
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)