Sterling managed to hold onto most of its recent strength at the end of last week despite some confusion over whether a Brexit deal with the EU was forthcoming, and the release of more soft economic data.
This morning Sterling is showing broad-based weakness, with GBP/EUR down 0.3% at €1.1131, GBP/CAD is also down at C$1.6862 and GBP/USD has fallen 0.4% to $1.2908. GBP/AUD is currently down at AU$1.7960 and GBP/NZD is unmoved at NZ$1.9543.
What’s been happening?
Euro exchange rates lost some of their traction on Friday morning after the Eurozone consumer price index saw an unexpected dip in August.
Investors were disappointed to find that the headline inflation rate had eased from 2.1% to 2.0%, accompanied by a similar decline in the core inflation measure.
A downtick in German retail sales also piled pressure on the euro on Friday, with July sales retreating into contraction territory on a month-by-month basis.
AUD saw an ongoing plunge last week as the Reserve Bank of Australia (RBA) interest rate hike bets continued to fall, with Australia’s second-biggest lender, Westpac, suddenly announced that it would be hiking its rates on variable home loans.
The US dollar continued to benefit from investors seeking safe havens as a growing storm in emerging markets, combined with ongoing global trade concerns, kept dollar demand high.
Conversely, the Canadian dollar experienced broad based weakness as fears began to grow that NAFTA renegotiations were going nowhere and that the country could end up locked out of any new North American free trade deal.
In the UK, it was revealed that house prices showed the biggest month-on-month fall in six years after Nationwide reported the average property lost 0.5% of its value in August.
What's coming up?
Today will see the release of the UK’s latest manufacturing PMI. Current estimates predict a rise from July’s 54 points to 55 points. Although manufacturing is not the most important PMI for the UK economy, any positive news could see the pound rise.
We’re here to talk currency whenever you need us, so get in touch if you want to know more about the latest news or how it could impact your currency transfers.
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