Published: 16 Jul at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, Germany,
Pound Sterling (GBP) Slumps as UK Wages Rise at Fastest Rate Since 2008
Sterling was left under pressure on Tuesday despite data revealing that UK unemployment remained at a multi-decade low of 3.8%. Added to this, UK wages rose at the fastest rate in almost 11 years.
However, the Pound slumped as there were some signs that the labour market was beginning to weaken, as employment growth slowed to a disappointing 28,000 in May.
Added to this, Brexit pessimism plagued Sterling as the Conservative Leadership contest continued into the final stage.
Looking ahead to Wednesday, the Pound could claw back some losses following the release of the UK Consumer Price Index (CPI). If inflation meets the Bank of England’s (BoE) target, it could provide Sterling with an upswing of support.
Pound Euro (GBP/EUR) Exchange Rate Falls despite Gloomy German Investor Morale
The Pound Euro (GBP/EUR) exchange rate slumped despite data showing that German investor morale plummeted for third consecutive month.
ZEW revealed that economic sentiment fell to a lower-than-forecast -24.5 in July, from -21.1 in June. The slump in sentiment is likely due to unresolved trade tensions between the US and China
as well as the ongoing political tensions with Iran.
Looking ahead to tomorrow, it is likely the Euro will slide against the Pound if the Eurozone’s Consumer Price Index (CPI) does not rise as high as forecast in June.
Pound US Dollar (GBP/USD) Exchange Rate Slumps Below $1.24 For the First Time in 27 Months
The Pound US Dollar (GBP/USD) slumped and the pairing plummeted below the $1.24 mark for the first time in 27 months as no-deal Brexit fears increased.
Meanwhile, US retail sales rose by a higher-than-forecast 0.4% in June as households increased their purchases of motor vehicles as well as other goods. The Dollar was further buoyed as core retail sales jumped by 0.7%, showing consumer spending remained healthy despite the ongoing US-China tensions.
Looking forward to Wednesday afternoon it is likely the Dollar will continue to rise against Sterling following the release of the US building permits and housing starts data. If the number of building permits approved in June rises higher than forecast, it could cause the GBP/USD exchange rate to slump.
Pound Canadian Dollar (GBP/CAD) Exchange Rate Falls as Oil Prices Stabilise
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate fell over the course of Tuesday as Brexit pessimism weighed on Sterling.
The oil-sensitive ‘Loonie’ likely received an upswing of support as oil prices steadied on Tuesday despite heightened tensions in the Middle East.
Looking ahead to tomorrow, it is likely the Bank of Canada
’s (BoC) Core inflation data will buoy the ‘Loonie’. If the Consumer Price Index (CPI) rises higher than forecast in June, it could cause the Pound Canadian Dollar (GBP/CAD) exchange rate to slide.
Pound Australian Dollar (GBP/AUD) Exchange Rate Slides as RBA Ready to Move Monetary Policy if Necessary
The Australian Dollar (AUD) rallied against Sterling (GBP) on Tuesday despite minutes from the Reserve Bank of Australia
(RBA) revealing the bank is willing to move monetary policy once again if it is necessary.
The minutes were from July’s meeting in which the bank slashed interest rates for the second time to an all-time low of 1%.
Looking ahead, the ‘Aussie’ could slump against Sterling following the release of Westpac’s Leading Index. If the index does not rise as high as forecast in June, it could weigh on the Australian Dollar.
Pound New Zealand Dollar (GBP/NZD) Exchange Rate Falls as NZ Inflation Rises
The New Zealand Dollar (NZD) rose against the Pound (GBP) on Tuesday as the New Zealand Consumer Price Index (CPI) rose by 1.7% in the second quarter of 2019, and quarter-on-quarter inflation rose by 0.6%.
However, some economists warned that the underlying picture for inflation was weak, and it was likely the Reserve Bank of New Zealand (RBNZ) would slash interest rates again in August.
Looking ahead, it is likely the risk-sensitive ‘Kiwi’ will react to reports on the continuing trade discussions between the US and China. If reports reveal talks are progressing smoothly, and face-to-face talks are announced, the Pound New Zealand Dollar (GBP/NZD) exchange rate could slump further.
As of Tuesday, 16th July 2019, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1068, GBP USD exchange rate was 1.2409, GBP AUD exchange rate was 1.7696, GBP NZD exchange rate was 1.8518, GBP CAD exchange rate was 1.624, and GBP CNY exchange rate was 8.5329.