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Pound softens ahead of second quarter UK GDP

business-articlesPound softens ahead of second quarter UK GDP
  • Falling UK house prices weigh on pound
  • Canadian dollar braced for unemployment figures
  • Wholesale trade sales dent US dollar

Pound braces for second quarter growth data
Fresh signs of weakness within the UK housing market left GBP exchange rates on the back foot yesterday as the sense of economic anxiety mounted.
The mood towards the pound could sour further this morning if second quarter UK gross domestic product softens as forecast.
Investors expect to see growth stall on the quarter, reflecting the increase in uncertainty surrounding Brexit and faltering production figures.
However, if the growth rate betters forecast this could encourage GBP exchange rates to recover some of their lost ground ahead of the weekend.
Canadian dollar losses forecast on jobs data
While June’s Canadian new housing price index figures proved weaker than anticipated this failed to weigh down the Canadian dollar.
A general increase in market risk appetite, driven by stronger Chinese trade data, helped to shore up CAD exchange rates.
Even so, if this afternoon’s set of employment figures fails to show signs of a tightening labour market the appeal of the Canadian dollar could sour.
Unless employment change shows a solid uptick on the month in July CAD exchange rates look set to falter.
US dollar vulnerable ahead of producer price index
The US dollar was left on a weaker footing as US wholesale trade sales continued to deteriorate in June.
Although the latest jobless claims figures saw a decline on the week, support for the US dollar proved limited yesterday – in part thanks to an increased sense of market risk appetite.
This afternoon’s producer price index may offer USD exchange rates a rallying point, however, if inflationary pressure shows signs of picking up.
On the other hand, disappointing producer price data could support Federal Reserve rate hike bets, leaving the US dollar under pressure.
Upcoming Data:
Friday, 9th June 2019
09:30 GBP Gross Domestic Product
13:30 CAD Unemployment Rate
13:30 USD Producer Price Index
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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