The euro tumbled on Thursday following the publication of some disappointing Eurozone PMIs.
The GBP/EUR exchange rate is currently trading in the region of €1.0919 (up from yesterday’s low of €1.0857), GBP/USD has advanced from $1.2918 to $1.3043, GBP/AUD has improved from AU$1.6195 to AU$1.6334, GBP/NZD is fluctuating between NZ$1.7933 and NZ$1.8042 and GBP/CAD rallied to C$1.6162 from C$1.6020.
Keep reading to find out what you can expect from the currency market today…
What’s been happening?
There’s no getting away from the fact that yesterday’s UK services PMI was hardly impressive.
The index of service sector output slumped from 53.8 to 53.2 – an 11-month low.
Markit economist Chris Williamson said of the report; ‘A summer slowdown was evident in the economy as the August PMI surveys showed slower rates of expansion in services and construction offsetting an improved performance in the manufacturing sector. The resulting overall expansion was the weakest for six months. Although the latest two months’ data put the economy on course for another 0.3% expansion in the third quarter, momentum is being gradually lost.’
He added that optimism is fading as a result of Brexit uncertainty.
Despite this, the pound had a pretty good day, shrugging off the services release and registering daily gains against currencies like the euro, US dollar and Canadian dollar.
During the Australasian session poor Aussie growth figures weakened AUD exchange rates, meaning GBP/AUD began Wednesday in a stronger position.
What’s coming up?
UK data releases are lacking today, so any Brexit-related reports are likely to be the main cause of GBP exchange rate movement.
The GBP/EUR exchange rate may also respond to retail PMIs for Germany and the Eurozone.
GBP/USD, on the other hand, may give up some of its recent gains if this afternoon’s US ISM services/non-manufacturing PMI impresses.
As it stands, the index is expected to climb from 53.9 to 55.5.
We also have the Bank of Canada (BOC) interest rate decision to look out for.
If the BOC is feeling in a positive mood after last week’s upbeat domestic growth figures, the odds of further interest rate hikes will increase and Canadian dollar exchange rates are likely to climb.
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)