Gloomy UK data sends Sterling lower
Philip McHugh December 17th 2019 - 2 minute read
- Pound falls away from recent highs
- Euro weakened by PMI report
- US-China trade news weighs on US dollar
Pound slides ahead of UK employment data
The pound initially got off to a strong start to the week as markets continued to take encouragement from the result of the general election.
However Sterling quickly found itself having to walk back gains following the publication of the UK’s latest PMI figures.
These indicated growth in the private sector slumped to a new three-year low in December, sparking fears the UK economy as a whole could face contraction in the fourth quarter.
GBP exchange rates then weakened further overnight amid renewed Brexit concerns on reports Boris Johnson will pass a bill ruling out an extension to the transition period.
The pound could come under further pressure today if the UK’s latest employment figures reveal a decline in wage growth.
Euro potential capped by PMI data
The Eurozone’s PMI figures proved the main catalyst of movement for the euro yesterday, with a disappointing manufacturing figure capping any upside in the single currency.
The euro may struggle to find momentum today in the absence of any notable Eurozone data.
Markets will look to a speech by European Central Bank President Christine Lagarde on Wednesday for guidance.
US dollar set for rally on industrial production rebound
A prevailing selling bias sent the US dollar lower on Monday.
This came partly on the back of a weaker-than-expected Empire State Manufacturing index, but appeared mostly driven by Friday’s announcement of a US-China trade deal.
However, the publication of the latest US industrial production figures could help the US dollar recoup some ground this afternoon.
Economists expect factory output to have rebounded in November.
Tuesday, 17th December 2019
09:30 GBP Average Weekly Earnings
10:00 EUR Eurozone Trade Balance
14:15 USD Industrial Production