You've landed on our UK website.
Click here to visit our USA website.

If you are having difficulty locating the information you require, we're here to help. Just get in touch and we will do our best to assist you.

Sterling stays low despite positive progression | US dollar reached a four-month high

Sterling stays low despite positive progression
Despite the pound seeing some positive progression last week, the GBP/EUR exchange rate fell from this month's best levels following the release of the first batch of post-Brexit data, which proved to be worse than predicted. The UK’s PMI offered the first real insight to the landscape after the referendum, offering a reliable and long-running indicator of UK economic activity. Results show that the UK economy is heading towards a recession.
Elsewhere, this week investors are expecting to see Sterling to US dollar exchange rate movement in response to the Federal Reserve’s interest rate decision.
US dollar reached a four-month high
Towards the end of last week, North American stock markets continued to climb with the dollar rising to a four-month high, resulting in a downward pressure on metal prices. Such a kick in the stock markets boosted the economy, and there was also data that showed that there are less Americans filing unemployment benefits, with confidence among homebuilders at a nine-year high.
The US dollar strength means that copper, and other commodities denominated in US dollars, are less affordable to investors in countries with other currencies. Quite the opposite to PMI data released in the UK, US flash PMI proved to come in at levels even better than predicted.
Surprises from the European Central Bank
Last week’s European Central Bank (ECB) delivered a couple of surprises and did not make any commitments to easing in September. Investors will be paying close attention to the European Banking Authority’s (EBA) stress test as it is likely that it could draw the Economic and Monetary Union’s (EMU) banking sector back into focus.
In the medium term, on the basis of real yield differentials, there is a potential upside for the euro when it comes to buying against the US dollar and the pound.
Neutral tone from the Bank of Canada
The Canadian dollar saw a hawkish Bank of Canada (BoC) meeting last week, where a neutral tone was kept, showing no willingness to ease off anytime soon. The BoC did however, reveal that it was revising down its growth forecast and pushing back the data of output gap closure. Following the press conference after the meeting, there seemed to be much more worry surrounding housing than forecasts imply, which comes in line with data that revealed further acceleration of nationwide house prices. 
The BoC did remain confident that data would, in time, rebound by claiming that if growth fails to meet expectations, easing may come back on the table.

Check our exchange rate

Thanks, we'll be in touch.

Check your inbox - one of our currency experts will be in touch to complete your quote.

If you want see our online exchange rates straight away, simply register online & log in.