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Pound could dip today

business-articlesPound could dip today
  • Pound weakness forecast on negative factory orders index
  • Eurozone inflation downgrade fails to dent euro
  • Dip in manufacturing sales set to drag on Canadian dollar

Pound vulnerable to UK factory orders decline
GBP exchange rates slipped yesterday and could shed further ground this morning if August’s CBI industrial trends orders index slides deeper into negative territory.
Another deterioration in factory orders could exacerbate existing Brexit worries and increase concerns that the UK economy is on the brink of recession.
Although forecasts point towards the index picking up from its nine-year low of -34 to -25 this may not be enough to offer the pound support. 
Falling Eurozone construction output set to weigh on euro
The euro shook off a surprise downward revision to the Eurozone consumer price index yesterday, even though this pushed inflation further away from the European Central Bank’s (ECB) 2% target.
As markets had already effectively priced in the impact of an imminent interest rate cut the impact of the weaker inflation rate proved limited.
EUR exchange rates could struggle today, however, if June’s Eurozone construction output shows signs of faltering.
Weak manufacturing sales may undermine CAD
Rising oil prices supported CAD yesterday, but demand for the Canadian dollar could fall on the back of this afternoon’s manufacturing sales data.
Forecasts point towards a sharp monthly contraction of -1.8%. 
As the global growth outlook remains muted any decline in manufacturing sales may feed worries over the resilience of the Canadian economy.
Upcoming Data:
Tuesday, 20th August 2019
10:00 EUR Eurozone Construction Output
11:00 GBP CBI Industrial Trends Orders Index
13:30 CAD Manufacturing Sales
Philip McHugh

Philip McHugh

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)

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