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Poor UK Construction Output Sees Sterling Edge Lower, Euro Softens on Missed Eurozone Growth and US Dollar Holds Steady ahead of Confidence Data

Published: 14 Aug at 11 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, France, Germany, Greece, Italy, Portugal,

Pound Sterling (GBP)
The British Pound softened versus many of its currency rivals during Friday’s European session. This can be attributed to June’s Construction Output Data which failed to meet with estimates on both a monthly and a yearly basis. On the year, June’s Construction Output hit 2.6% growth; lower than the median market forecast 3.3%. On the month, Construction Output came in at 0.9% growth in June; missing the market projection of 2.0%.

Euro (EUR)
European economic data produced poor results on Friday which caused the common currency to decline versus many of its currency rivals. French Gross Domestic Product stagnated in the second-quarter with the preliminary figure showing 0.0% growth. Second-quarter German growth came in at 0.4%; slightly lower than the 0.5% growth forecast. Italian and Portuguese growth figures also failed to impress. This all lead to a disappointing result from Eurozone Gross Domestic Product which came in at 1.2% on the year; dipping below the market consensus of 1.3% growth. However, Eurozone inflation data met with estimates which slowed the downtrend.

Also preventing a larger Euro declination was news that Greek MPs voted to accept the terms for the third bailout deal. Whilst, once again, Greek Prime Minister Alexis Tsipras relied on opposition support to pass the deal, the fact that Greek MPs were swift to vote should see the Hellenic nation receive funds before August 20th, when a large repayment to the European Central Bank is due.

US Dollar (USD)
As traders await Industrial Production, Manufacturing Production and the University of Michigan Confidence report, the ‘Greenback’ (USD) is generally holding steady versus most of its currency rivals. The significant forthcoming data publications ought to have a significant impact on US Dollar movement.

Australian Dollar (AUD)
With improving market sentiment as the Chinese Yuan settles and Greek MPs accept bailout terms, the ‘Aussie’ (AUD) strengthened against many of its closest currency competitors. Also aiding the uptrend was a speech from the Reserve Bank of Australia (RBA) Assistant Governor, Kent, who stated that Australia’s labour market is now over the worst period.

New Zealand Dollar (NZD)
The New Zealand Dollar softened against some of its currency rivals after second-quarter Retail Sales ex Inflation came in at 0.1% growth; missing the median market forecast 0.5% growth. July’s Non Resident Bond Holdings held in line with the previous figure of 69.7%.

Canadian Dollar (CAD)
Oil prices slid to a fresh 6 and a half year low on Friday, causing dampened demand for the Canadian Dollar. The drop in oil prices had been linked to US stockpiles and US Dollar strength adding to glut fears. Canadian Manufacturing Shipments, due for publication later on Friday afternoon, is unlikely to have a significant impact with trader focus dominated by oil prices.
As of Friday, 14th August 2015, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.4081, GBP USD exchange rate was 1.5643, GBP AUD exchange rate was 2.1204, GBP NZD exchange rate was 2.3932, GBP CAD exchange rate was 2.048, and GBP CNY exchange rate was 9.9986.
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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