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Euro Faces Uncertainty over Strike Action and Eurozone Unemployment

Published: 31 May at 11 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, France, Germany, Italy,

Pound Sterling (GBP)
The Pound has been trending in a softer position against most of its rivals today, with losses likely stemming from the fact that the day’s only UK data has been negative.
This has consisted of the Lloyds business barometer, which has fallen from 38 points to 32, which represents the lowest figure seen since 2013.
Elsewhere, the ‘Brexit’ debate has rumbled on, with the latest claims made by the ‘Out’ campaign being that fuel VAT could be cut or scrapped if the UK left the EU.
The first UK data due tomorrow morning will be the Nationwide house prices for May; a rise has been predicted on the month while a slight decline is expected on the year.
During the European session the interbank Pound Sterling to Euro (GBP/EUR) exchange rate was in the region of 1.3088

Euro (EUR)
The Euro has been through the mill against its peers recently, with some of the common currency’s losses stemming from the news that French strike action has intensified ahead of Euro 2016, with rail worker strikes and Air France pilot walkouts intensifying the pressure placed on the currently implacable government.
In domestic data, the Euro has been alternately been supported by a dip in the German unemployment rate for May and let down by an estimation of continued negativity for the Eurozone inflation rate on the year during the same month.
Tomorrow morning’s Eurozone ecostats will be made up of finalised Italian, French, German and Eurozone manufacturing PMIs for May; the only change expected is a drop in the Italian variant.
During the European session the interbank Euro to Pound Sterling (EUR/GBP) exchange rate was in the region of 0.7628

US Dollar (USD)
The US Dollar has been positive overall today, with recent hawkish comments from Fed officials serving to amplify the appeal of the ‘Buck’ to investors.
Although neither Fed Chair Janet Yellen nor official James Bullard have specified a precise month for an interest rate hike to take place, both have indicated that they see hike taking place sooner rather than later.
This afternoon will bring a range of notable US ecostats, with the annual April personal consumption expenditure core and May consumer confidence outcome being likely to cause the most movement. The first result is forecast to remain at 1.6%, while the second has been predicted to rise from 94.2 to 96.3.
During the European session the interbank US Dollar to Pound Sterling (USD/GBP) exchange rate was in the region of 0.6842

Australian Dollar (AUD)
The Australian Dollar has made considerable gains against all of its regular peers today, thanks to an optimistic prediction that has been made for the national GDP result, which is due tomorrow morning.
The Australian Bureau of Statistics (ABS) has estimated that quarterly growth for the first quarter could be as high as 1.1%, which eclipses other predictions of a lesser 0.8% outcome.
In addition to this GDP data, the ‘Aussie’ is also expected to be moved tomorrow morning by the AiG performance of manufacturing index for May, which previously printed at 53.4.
During the European session the interbank Australian Dollar to Pound Sterling (AUD/GBP) exchange rate was in the region of 0.4960

New Zealand Dollar (NZD)
Like its antipodean neighbour, the New Zealand Dollar has also been boosted in exchange rate pairings recently, with its only real loss being recorded against the ‘Aussie’.
In New Zealand’s case, its gains have come from the news that business confidence in May has risen from 6.2 to 11.3.
Looking ahead, the ‘Kiwi’ is likely to be moved by tomorrow’s early QV house prices result on the year in May, as well as later on when the results of the national dairy auction are announced.
During the European session the interbank New Zealand Dollar to Pound Sterling (NZD/GBP) exchange rate was in the region of 0.4606

Canadian Dollar (CAD)
The Canadian Dollar has been on a general downtrend against the competition so far today, with the most recent domestic data consisting of a poor Q1 current account and industrial product price result for April.
This afternoon’s Canadian data will be made up of GDP results for March and the first quarter; forecasts have been for a decline on the year but a considerable rise for the annualised Q1 result on the quarter.
During the European session the interbank Canadian Dollar to Pound Sterling (CAD/GBP) exchange rate was in the region of 0.5245

As of Tuesday, 31st May 2016, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.3019, GBP USD exchange rate was 1.4493, GBP AUD exchange rate was 2.0025, GBP NZD exchange rate was 2.1349, and GBP CAD exchange rate was 1.8958.
Dominic Lee About Author: (377 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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