Sterling on Uptrend ahead of UK GDP Result, Euro Remains Soft after ECB Dovishness

Published: 26 Oct at 5 PM Tags: Euro, Dollar, Pound Sterling, America, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China,

Pound Sterling

This morning saw the September BBA Loans for House Purchase fall short of forecast, failing to show improvement on the month as the figure declined to 44,489.

While this suggested that the domestic housing market remains in a relatively fragile state Sterling has nevertheless remained on a positive trend against the majority of rivals today.

Trading is likely to turn more cautious ahead of tomorrow’s third quarter Gross Domestic Product result, however, although forecasts expect economic growth to hold steady on the year at 2.4%.

Euro

Sentiment towards the single currency has remained bearish on Monday, in spite of better-than-expected readings on the IFO Business Sentiment Surveys.

Both the Business Climate and Expectations indexes proved stronger than forecast, while the Current Assessment clocked in at a more dovish decline.

Although this indicates that the longer-term prospects of the Eurozone economy remain positive the data was ultimately not hawkish enough to encourage pundits to buy back into the Euro.

US Dollar

Odds of a 2015 interest rate increase from the Fed took another blow today as New Home Sales were shown to have experienced a sharp contraction of -11.5% in September.

Weakening housing demand offers another strong argument against an imminent rate hike, leading to a general decline in the appeal of the ‘Greenback’ amidst a surge in risk appetite.

Australian Dollar

Following Friday’s shock announcement of a 0.25 percentage point interest rate cut from the People’s Bank of China (PBoC) the ‘Aussie’ has been on decidedly bullish form throughout Monday.

The appeal of the antipodean currency has also been shored up by the declining likelihood of a near-term rate hike from the Fed, with the Australian Dollar capitalising on the weakness of the ‘Buck’ today.

New Zealand Dollar

Ahead of tonight’s New Zealand Trade Balance the ‘Kiwi’ is also on an uptrend, gaining ground on the back of the day’s dovish US data.

With investors anticipating the figure to show a narrowing of the national deficit, improving from -1035 million to -825 million New Zealand Dollars, the South Pacific currency could see a further appreciation in value overnight.

Canadian Dollar

The fortunes of the ‘Loonie’ have been relatively mixed on Monday, as a general risk demand has failed to benefit the commodity-correlated currency.

Largely this was due to the continuing downturn in oil prices as the global glut in supply weighs heavily on the market, with storage capacities almost at their limit.

Brent crude remains bearish, on a downtrend in the region of $47.70.

As of Monday, 26th October 2015, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.3882, GBP USD exchange rate was 1.5354, GBP AUD exchange rate was 2.1184, GBP NZD exchange rate was 2.2642, GBP CAD exchange rate was 2.0202, and GBP CNY exchange rate was 9.7549.

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