gbp 10

Pound strengthens despite UK economic contraction as a sour market mood limits the Australian Dollar

Pound News: Sterling Strengthens Despite UK GDP Growth Rate Contraction 

The Pound has strengthened against many of its major rivals today despite the confirmation from the Office for National Statistics (ONS) that the UK’s economy contracted 1.6% during the first quarter of 2021. 

Martin Beck, senior economic advisor to the EY ITEM Club commented on the latest figures saying: ‘The quarter’s contraction was a far cry from the 19.6% quarter-on-quarter fall in output during the first lockdown in Q2 2020.’ 

Tomorrow, Pound investors will be keeping an eye on the UK’s Markit manufacturing PMI for June which is forecast to show a softer, albeit sustained growth in the sector as the UK economy continues to recover from the coronavirus pandemic. 

Euro News: Euro Weakens as Eurozone Inflation Slows 

The Euro fell back today, weakening in response to the Eurozone’s latest consumer price index, which reported a slowing of inflation this month. 

Inflation has now slipped back within the European Central Bank’s (ECB) target range, further denting any hope that the bank could start to tighten its monetary policy anytime in the foreseeable future. 

The latest retail sales figures from Germany could provide fresh impetus for the Euro tomorrow, with a sharp rebound in sales growth potentially boosting the Euro. 

US Dollar News: US Dollar Strengthens on ADP Employment Change Data 

The US Dollar has climbed today as the latest ADP employment change data from the US indicated the US labour market added 692,000 jobs in June, beating forecasts for an expansion of 600,000, and bolstering hopes for Friday’s more influential payroll figures to also impress this month. 

Tomorrows ISM manufacturing PMI from the US along with initial US jobless claims could provide further support to the US Dollar so long as they print positively. 

Canadian Dollar News: CAD Exchange Rates Supported by Better-than-Expected GDP Figures 

The Canadian Dollar was able to trend higher through today’s session, as the commodity-linked currency was supported by a strong uptick in oil prices as well as Canada’s latest monthly GDP figures, which reported a smaller-than-expected contraction of domestic growth in April. 

Australian Dollar News: ‘Aussie’ Weakens on Sour Market Mood 

The Australian Dollar has been trending lower today as a rising risk-off mood and a strengthening US Dollar does little to support the ‘Aussie.’ 

However there’s a chance for AUD exchange rates to rally later overnight on Wednesday as Australia’s latest trade figures are expected to report a bumper trade surplus in May. 

Upcoming Data 

Thursday, 1st July  

00:00   AU Markit Manufacturing PMI Final (Jun) 

02:30   AU Trade Balance (May) 

07:00   DE Retail Sales MoM (May) 

09:00   EU Markit Manufacturing PMI Final (Jun) 

09:30   UK Markit/CIPS Manufacturing PMI Final (Jun) 

13:30   US Initial Jobless Claims (26/Jun) 

15:00   US ISM Manufacturing PMI (Jun) 

Friday, 2nd July 

13:30   US Non-Farm Payrolls (Jun) 

14:30   CA Markit Manufacturing PMI (Jun)