The pound plummeted on Tuesday as the latest UK PMIs printed well below expectations.
Sterling is showing signs of recovery today however, with GBP/EUR firming at €1.1218, GBP/USD edging higher to $1.2732 and GBP/CAD climbing to C$1.6719, while GBP/AUD and GBP/NZD rally, striking AU$1.7984 and NZ$1.9480 respectively.
Looking ahead, the Eurozone economy looks set to remain in the spotlight today, as the bloc publishes its latest inflation and unemployment figures later this morning.
What’s been happening?
The pound was left looking a little bruised following Tuesday’s session as a backdrop of Brexit uncertainty continued to hammer sentiment in the currency despite a lull in fresh headlines.
Likely adding to the pressure on GBP exchange rates however was the publication of the Confederation of British Industry’s (CBI) latest distributive trades index, which reported that UK retail sales slowed dramatically in October following some strong sales growth in previous months.
This drop in Sterling left the GBP/EUR exchange rate trending lower yesterday, despite a shock drop in the Eurozone’s third quarter GDP being a cause for concern for many EUR investors.
Meanwhile the GBP/USD exchange rate struck a two-month low on Tuesday, leaving the pairing to test the lower boundaries of $1.27 as demand for the US dollar was buoyed by the Eurozone’s weak growth figures.
What’s coming up?
The release of the Eurozone’s latest inflation and unemployment figures is likely to result in the euro remaining the centre of attention this morning.
Today’s data may see the euro fare a little better that yesterday’s GDP figures however with the bloc’s unemployment rate expected to have held at a decade-low in September while both headline and underlying inflation picked up in October.
Meanwhile the US will publish its latest ADP employment figures later this afternoon, giving investors their first look at the state of the US jobs market ahead of Friday’s non-farm payroll numbers - likely buoying the US dollar if the US workforce continued to have expanded at a robust pace in October.
Finally the absence of any notable data may leave the pound vulnerable to additional losses today, with the Bank of England’s upcoming rate decision on Thursday potentially helping to limit some of the downside risks to the UK currency.
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)