Compare exchange rates, send money abroad and online

Mon 15 Jul 2024 08:43GMT

Sterling Holds Gains despite Missed Services Estimates, Single Currency Cools on Eurozone Retail Sales and US Dollar Holds Steady ahead of ISM Non-Manufacturing Data

Published: 5 Aug at 12 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, Greece,

Pound Sterling (GBP)
In response to speculation that the government’s recent sale of shares in the Royal Bank of Scotland (RBS) will attract foreign investment, the Pound advanced versus many of its currency rivals. However, gains were halted after the UK Services PMI missed estimates of a drop from 58.5 to 58.0, with the actual result falling to 57.4. The poor result didn’t have a significantly detrimental impact on demand for the Pound, however, given that the services sector is still showing robust growth and the result is unlikely to affect future policy decisions.

Euro (EUR)
Mixed economic data results caused the single currency to decline versus its currency rivals on Wednesday. One particularly disappointing data result was Eurozone Retail Sales which failed to meet with estimates on both a monthly and an annual basis. The shared currency depreciation can also be linked to mounting speculation that Greece will not be able to survive without some form of debt restructuring. This could mean long delays before the terms of the third bailout deal are finalised.

US Dollar (USD)
The US asset is holding steady versus its currency competitors on Wednesday. On Tuesday, US Dollar gains were initiated by Federal Reserve Bank of Atlanta President Dennis Lockhart who suggested a September rate hike was on the cards. As traders await the ISM Non-Manufacturing Composite, the ‘Greenback’ (USD) is unlikely to see any significant volatility. A positive result should fuel Dollar appreciation as traders become increasingly hawkish with regards to bests as to the timing of a Fed rate hike.

Canadian Dollar (CAD)
Oil prices advanced in the early stages of Wednesday’s European session amid easing concerns regarding China’s equity markets. This caused the Canadian Dollar to strengthen versus its major peers. However, oil prices cooled significantly as Wednesday progressed amid speculation of a near-term Fed rate hike and ongoing difficulty in China’s economy. The ‘Loonie’ (CAD) cooled in response to oil price fluctuations.

Australian Dollar (AUD)
After Reserve bank of Australia (RBA) Governor Glenn Stevens stated, on Tuesday, that the commodity price crash had caused a significant ‘Aussie’ (AUD) depreciation, the Australian Dollar gained versus its peers. The appreciation was due to speculation that the RBA will hold the cash rate for longer-than-anticipated given that devaluation has occurred without central bank intervention. However, Wednesday has seen the risk-correlated asset decline after the National Institute of Economic and Social Research (NIESR) warned of a global economic slowdown. This had a marked effect on trader risk-appetite. Positive Australian services data was overshadowed by a weaker-than-expected Chinese Composite PMI.

New Zealand Dollar (NZD)
The ‘Kiwi’ (NZD) declined versus its rivals for similar reasons to its South Pacific neighbour. Cooling market sentiment and low commodity prices are the principle reasons behind the New Zealand Dollar declination, with tanking dairy prices having the greatest impact. The ‘Kiwi’ is holding gains versus the ‘Aussie’, however, as traders speculate that Tuesday’s Australian Dollar appreciation was somewhat overdone.

As of Wednesday, 5th August 2015, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.431, GBP USD exchange rate was 1.5601, GBP AUD exchange rate was 2.1216, GBP NZD exchange rate was 2.3934, GBP CAD exchange rate was 2.056, and GBP CNY exchange rate was 9.6878.
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.

Live Exchange Rates