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Fri 19 Jul 2019 02:51GMT

UK Pound Declines on Mixed CBI Data, Euro Rallies on Greek Bailout Optimism and US Dollar Holds Steady ahead of Durable Goods Orders

Published: 27 Jul at 12 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, USA, Germany, Greece,

Pound Sterling (GBP)
The British Pound declined versus the majority of its most traded currency rivals on Monday morning. The depreciation can be linked to a general reluctance to invest ahead of the significant second-quarter Gross Domestic product data due for publication on Tuesday. Many analysts expect the result of the UK’s growth data to have a marked impact on future Bank of England (BoE) Monetary Policy Committee (MPC) interest rate decisions.

In addition to traders awaiting the British growth data, the Pound softened in response to mixed results from Monday’s Confederation of British Industry (CBI) data. CBI Business Optimism for the third-quarter bettered the median market forecast drop from 3 to 1, with the actual result reaching 8. However, CBI Industrial trends Orders declined to -10 in July despite the market consensus of a rise from -7 to -5.9.

Euro (EUR)
The shared currency rallied versus its major peers on Monday morning as traders prepare for the ‘troika’ meeting. Greece’s creditors convene later today to discuss the Hellenic nation’s third bailout package. Most analysts expect that troika of creditors to agree to bailout Greece before August 20th when a European Central Bank (ECB) payment is due. This is especially likely given that Greek MPs have agreed to accept the terms of the bailout in addition to most other Eurozone officials.

Also aiding the single currency uptrend was better-than-expected data results out of the currency bloc’s most powerful nation. German IFO Business Climate, IFO Current Assessment and IFO Expectations all bettered the respective median market forecasts for July.

US Dollar (USD)
The US asset is generally holding steady versus its currency rivals on Monday morning. This is due to traders awaiting Durable Goods Orders data. Durables have significant economic weighting, so a positive result could impact upon the Federal Open Market Committee (FOMC) interest rate decision later this week. Similarly, a negative result could cause the US asset to dive considerably amid fears that the FOMC will delay tightening monetary policy for some time to come.

The US economic docket is rich with influential domestic data publications over the coming week. Therefore, there is a high likelihood of ‘Greenback’ (USD) volatility as traders try to determine how the results will impact interest rates.

As of Monday, 27th July 2015, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.4035, GBP USD exchange rate was 1.556,
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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