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Fri 19 Jul 2024 12:01GMT

GBP Gains on Manufacturing PMI, EUR Softer, AUD Trends Lower after Building Approvals Flop

Published: 4 Nov at 7 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China,

Pound Sterling
The Pound broadly strengthened on Monday as investors responded to the UK’s stronger-than-forecast manufacturing PMI for October. Instead of declining as expected, the index pushed to a three-month high. The Pound accordingly strengthened against the Euro, Australian Dollar and New Zealand Dollar. If this week’s UK Construction/Services PMI’s also surprise to the upside, Sterling strength could persist.

US Dollar
Ahead of the release of the US ISM Manufacturing Index, the US Dollar advanced on a broadly softening Euro and was little changed against the Pound. Although economists have forecast that the measure of manufacturing declined from 56.6 to 56.2 in October, the index could surprise to the upside. If that proves to be the case the ‘Greenback’ could end the day trading higher.

On Monday the Euro came under pressure as Manufacturing PMI’s for the Eurozone and its largest economies were negatively revised. Given that the European Central Bank is scheduled to deliver its interest rate decision later this week, the prospect of quantitative easing being deployed will keep the Euro trending lower.

Australian Dollar
A dismal domestic building approvals report saw the Australian Dollar post extensive declines during the Australasian session. The -11.0% decline in approvals far exceeded the drop of -1.0% anticipated and caused ‘Aussie’ weakness across the board. A dip in China’s Non-Manufacturing PMI compounded the Australian Dollar downtrend.

New Zealand Dollar
While the New Zealand Dollar was able to strengthen against its Australian counterpart, it was softer against both the Pound and Euro ahead of this week’s employment figures for New Zealand.

Canadian Dollar
The ‘Loonie’ came under pressure on Friday after Canada’s growth data failed to print at the levels expected. With the softening in oil prices expected to undermine Canada’s economic prospects, the Canadian Dollar may maintain a weaker bias in the weeks and months ahead.
As of Tuesday, 4th November 2014, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.2751, GBP USD exchange rate was 1.6005, GBP AUD exchange rate was 1.8295, GBP NZD exchange rate was 2.0457, GBP CAD exchange rate was 1.8235, and GBP CNY exchange rate was 9.7875.
Patrick James About Author: (289 Posts)Patrick completed his economics degree just as the global financial crisis struck in 2008. In the intervening years Patrick has made his mark, climbing to a prominent position within a large financial services provider. As part of his role Patrick uses his expertise to advise companies of the best ways to safeguard against currency risk.

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