SendMoney.org.uk

Compare exchange rates, send money abroad and online

Thu 24 Aug 2017 07:33 GMT

Daily Currency Update: Pound Slides as Bank of England (BoE) Downgrades Forecasts

Published: 3 Aug at 4 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Germany, Japan,

Pound Sterling (GBP)

The afternoon’s Sterling movements have been negative in virtually all cases. The Pound has fallen by over -0.8% against the Euro and US Dollar, as well as dropping by more than -1% against the New Zealand Dollar and Japanese Yen.

This spread of poor exchange rates has been triggered by a gloomy set of statements from the Bank of England (BoE). After leaving interest rates at 0.25%, BoE officials stated that the 2017 and 2018 growth forecasts had been downgraded.

Along with predictions of higher inflation and slower wage growth, the BoE highlighted Brexit as an issue that was continuing to damage the UK economic outlook.

In the coming week, the Pound could stage a minor recovery on Thursday if the UK trade deficit reduces.

Euro (EUR)

Thursday has seen the Euro make a 0.8% rise against the Pound but a smaller advance against the stronger US Dollar.

In daily news, overall Eurozone growth has slowed in July, but retail sales have surged in June.

Rounding off this week’s Eurozone news will be Friday’s construction and factory orders figures for Germany.

The Euro could shed its recent gains when the data comes out, as predictions are for both German announcements to show slowing growth.

US Dollar (USD)

Thursday has seen a sharp slowdown in US economic activity, which has led the US Dollar to decline against the Euro. With the Pound remaining battered, however, a USD GBP rise has been seen.

The ISM non-manufacturing PMI for July declined from 57.4 points to 53.9, which was the lowest figure seen in 11 months. Additionally, the actual result was far lower than the predicted 57 point outcome.

USD traders are primed for Friday’s US ecostats which will cover the trade balance in June, as well as employment results for July.

The longstanding US trade deficit is not expected to change much, but if unemployment falls to 4.3% as expected then the US Dollar’s value could increase.

Australian Dollar (AUD)

Although the US Dollar has been in relatively low demand today, traders have still been considering the Australian Dollar too risky.

This has caused a devaluation of the Australian Dollar against all but the weaker Pound.

In domestic news, the Australian trade surplus shrank in June from 2.02bn to 0.86bn, a much lower figure than had been projected.

On Friday morning, a Reserve Bank of Australia (RBA) statement on monetary policy will be released. The Australian Dollar tumbled earlier in the week on dovish RBA remarks, so another confirmation of this outlook could cause further AUD losses.

New Zealand Dollar (NZD)

While the Australian Dollar has not benefited from US economic uncertainty, the same cannot be said of the New Zealand Dollar.

The NZD has risen across the board today, having been pushed up by growing concerns about the US economy and the Trump administration.

The next direct domestic data isn’t out until August 9th, so the New Zealand Dollar may instead be influenced by Friday’s US jobs figures. If these make the US Dollar more appealing to traders, then the New Zealand Dollar may fall by the wayside.

Canadian Dollar (CAD)

On a quiet day for the Canadian economy, the Canadian Dollar has advanced against the devalued Pound and US Dollar but failed to make much headway against the Euro.

This mixed performance comes as crude oil prices fluctuate, having previously hit a high of $50 per barrel earlier in the week.

The main event on Friday will be the Canadian unemployment rate announcement. No change is expected from 6.5%, but if the number of employed persons falls then the Canadian Dollar could slip in value.
As of Thursday, 3rd August 2017, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1064, GBP USD exchange rate was 1.3142, GBP AUD exchange rate was 1.6519, GBP NZD exchange rate was 1.7662, GBP CAD exchange rate was 1.6523, and GBP JPY exchange rate was 144.4873.
Laura Parsons About Author: (363 Posts)Laura works in the financial sector as a currency analyst, studying the latest global economic developments and assessing their impact on the foreign exchange market. Laura uses her currency knowledge to write articles focussing on market movements and trends for several independent financial websites.

Live Exchange Rates