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Pound Sterling (GBP) Exchange Rates Fluctuate Following 10 Month Slowdown in Construction as Sector Nudges Closer to Recession

Published: 4 Feb at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China,

Pound Sterling (GBP) Exchange Rates Slip Following Construction PMI Data

Today saw the release of the Markit construction PMI, which revealed a slip from the previous 52.8 to 50.6, leading to Pound weakness.

Construction rose at its slowest pace for ten months, with Duncan Brock, Group Director at the Chartered Institute of Procurement and Supply saying:

‘The biggest shock came in the form of job creation which has managed to suffer the slings and arrows of Brexit highs and lows with solid hiring since the referendum result. Employment rose at the slowest rate since July 2016 and with optimism also in short supply, the sector only needs a small nudge to tip it closer to recession.’

Pound Sterling Euro (GBP/EUR) Exchange Rate Makes Gains after Poor Eurozone Data

This morning saw the release of the Spanish unemployment change data, which increased higher-than-forecast to 83.5K in January, limiting Euro sentiment.

Further data releases this morning were also poor, with Sentix investor confidence slipping further to -3.7, and the Eurozone’s Producer Price Index sliding from 4% to 3% on an annualised basis.

Pound Sterling US Dollar (GBP/USD) Exchange Rate Fluctuates Despite Strong US Jobs Data

The US Dollar remained buoyed against the Pound over the course of today, likely still benefitting from the positive data releases on Friday, which saw January’s data mark 100 straight months of job gains in the US.

Despite this, new orders for US made goods fell unexpectedly in November as there were sharp declines in demand for machinery and electrical equipment, which may have weighed down the US Dollar.

President Donald Trump stated over the weekend that the US and China have a ‘good chance to make a deal’, which likely decreased global risk sentiment.

Pound Sterling Canadian Dollar (GBP/CAD) Exchange Rate Impacted Despite Poor Canadian PMI Data

The Pound Canadian Dollar (GBP/CAD) exchange rate remained fairly subdued over the course of the session until the Pound was able to claw back some of its losses against the ‘Loonie’.

The pairing remains weighed down despite Canada’s manufacturing PMI data released at the end of last week, which showed that the sector saw its slowest rise in new work for over two years, although the slowdown is predicted to be temporary.

Pound Sterling Australian Dollar (GBP/AUD) Pushes Back After Australian Building Approvals Slide

The Pound Australian Dollar (GBP/AUD) exchange rate made some gains over the course of today’s session likely due to the disappointing Australian data.

Australian building permits slipped by a much-worse-than-expected -8.4% despite a forecast predicting growth, the second consecutive month of falls, likely weighing down the ‘Aussie’.

Pound Sterling New Zealand Dollar (GBP/NZD) Exchange Rate Rises despite Jump in NZ Building Permits

The Pound New Zealand (GBP/NZD) exchange rate fluctuated during today’s session, with it being likely that the release of New Zealand’s seasonally adjusted buildings permits kept the Pound weighed down.

December’s building permits rose from the previous -1.9% to 5.1%, the best figure seen since August 2018 - although this could do little to stop the Pound advancing later in the afternoon.

As of Monday, 4th February 2019, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1396, GBP USD exchange rate was 1.3035, GBP AUD exchange rate was 1.8058, GBP NZD exchange rate was 1.8945, GBP CAD exchange rate was 1.7097, and GBP CNY exchange rate was 8.7921.
Dominic Lee About Author: (474 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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