The pound punched higher yesterday, particularly against the US dollar which suffered a dramatic fall from grace amidst easing global trade concerns.
Sterling has begun to walk back some of its gains this morning however, with GBP/EUR sliding to €1.1223, GBP/USD retreating to $1.3228 and GBP/CAD dipping to C$1.7070. Meanwhile GBP/AUD and GBP/NZD are both falling, striking AU$1.8135 and NZ$1.9762 respectively.
Looking ahead to today’s session the Eurozone’s latest PMI figures are likely to be in focus, with the euro potentially slipping if the numbers show growth in the bloc’s private sector continued to slow this month.
What’s been happening?
The pound shot higher during yesterday’s trading session, with the currency’s initial gains being driven by the UK’s latest retail figures as sales expanded 0.3% in August, avoiding a 0.2% contraction that had been forecast.
The pound’s gains were shored up by a sudden rout in the US dollar, which saw the GBP/USD exchange rate experience the most dramatic movement of any Sterling pairing on Thursday, surging around 1.1% to strike a new three-month high.
There were a few factors behind the ‘greenback’s’ sharp sell-off, but a slump in the US bond market and easing trade concerns appeared to be the main catalysts behind the US dollar’s sudden weakness.
Meanwhile gains in the GBP/EUR exchange rate proved more modest than in other Sterling pairings, with the ongoing Brexit negotiations in Salzburg and European Council head Donald Tusk’s dismissal of Theresa May’s trade plan limiting the pairing.
What's coming up?
The euro is likely to be in focus today as markets await the release of the Eurozone’s latest PMI figures.
We could see the single currency drift lower this morning as economists forecast the flash reading will show that the bloc’s private sector continued to slow this month.
Meanwhile the Bank of England (BoE) will publish its quarterly bulletin later today, with the pound potentially building on its recent momentum if the bank strikes an optimistic tone in its latest assessment of the UK economy.
Finally in the absence of any notable US data, the US dollar may extend it losses today if market trade concerns continue to ease.
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