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Pound Rebounds from Recent Weakness, Euro Limp on Mixed Eurozone Data

Pound News: Sterling Rebounds Ahead of Bank of England (BoE) Decision

Investors spent most of Wednesday’s session buying back the Pound after many recent sessions of losses. There was little drive behind the Pound’s gains besides investors buying the currency back up from its lows.

Anxiety about the possibility of a ‘no-deal’ Brexit persisted and put a lid on the Pound’s recovery, as the EU began to prepare for the same possibility.

Sterling also rose ahead of today’s Bank of England (BoE) decision. Investors expect the bank to remain relatively optimistic despite Brexit uncertainties, which has helped Sterling edge away from its worst levels.

Euro News: Eurozone Inflation Rises but Other Factors Weigh on Shared Currency

The Eurozone’s October Consumer Price Index (CPI) projections were solid yesterday, indicating that Eurozone price pressures were still rising despite US trade concerns. Notably, the yearly core inflation rate beat its 1% expectations and climbed from 0.9% to 1.1%.

Despite this the Euro remained unappealing to investors. Poor German retail sales stats from September as well as the underwhelming Eurozone growth projections published earlier in the week continued to weigh on the shared currency.

No notable Eurozone data will be published today, leaving the Pound to Euro exchange rate to react to potential Brexit developments or the strength of the US Dollar.

US Dollar News: USD Losses Limited as US Data Continues to Impress

While the Pound rebounded against most major rivals, its gains against the US Dollar were smaller. The US Dollar’s losses yesterday were limited as the currency continued to find fresh support in the form of stronger US data.

According to ADP’s October employment change report, the US job market remained strong. The figure came in at 227k rather than the predicted 189k.

This left investors even more anxious to see tomorrow’s US Non-Farm Payroll report, but the US manufacturing PMI from ISM due to be published today may prove influential too.

Canadian Dollar News: Canadian Growth Rate Beats Forecasts

The Pound to Canadian Dollar recovered most of its weekly losses yesterday, but its gains were limited by the latest Canadian data release.

Canada’s August Gross Domestic Product (GDP) growth was expected to have slowed from 0.2% to a stagnant 0.0%. However, the figure unexpectedly came in at a better 0.1%. Canadian PPI also beat expectations in September according to Wednesday’s figures.

The Canadian Dollar may see further support tomorrow if Canada’s October manufacturing PMI impresses. This may cause GBP/CAD to concede some of the ground it has won back.

Australian Dollar News: Australian Inflation Slows as Expected

Demand for the Australian Dollar was limited yesterday, as the latest data showed that inflation had slowed as expected; Australia’s Q3 inflation rate slowed from 2.1% to 1.9% year-on-year.

On top of weaker inflation, Australian Dollar demand was limited by underwhelming Chinese data. As China is Australia’s biggest trade partner, this made the ‘Aussie’ less appealing.

Speaking of trade, AUD investors will spend much of today’s session digesting Australia’s September trade balance results. If they show minimal damage from US-China trade fears, the Australian Dollar is more likely to put in a strong performance.

 

Upcoming Data

 

Thursday, 1st November

00:30    Australian Trade Balance

09:30    UK Manufacturing PMI

12:00    Bank of England Policy Decision

12:30    Bank of England Governor Carney Speech

12:30    Canadian Manufacturing PMI

12:30    US Non-Farm Productivity

14:00    US Manufacturing PMI

 

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To keep up to date with the Euro, visit the Euro blog in our Currency News section.

 

Jack Wiles

Currency Trader

JSW@fcgworld.co.uk    

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