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Sterling Sentiment Lifted by Robust Manufacturing PMI

Pound News: GBP Strengthens in Wake of Factory PMI

The Pound (GBP) strengthened against the majority of its peers on Tuesday in reaction to the release of the UK’s latest Manufacturing PMI.

While the PMI slipped slightly in December from the multi-year high struck in November, it remained ahead of 2017’s average rate of expansion, with an upbeat outlook amongst the firms surveyed suggesting that this robust growth could persist well into 2018.

Looking ahead to later today, Sterling may continue to strengthen following the release of the UK’s latest Construction PMI, with economists forecasting that Britain’s building sector will have expanded slightly faster in December.

Euro News: GBP/EUR Fluctuates as Eurozone PMI Figures Impress

The Pound to Euro (GBP/EUR) exchange rate was met by volatility yesterday as the latest Eurozone Manufacturing PMI readings confirmed that factory activity in the bloc struck a record high at the end of 2017.

This capped off what has already been a stellar year for Eurozone growth, and helped the Euro become the strongest performing G10 Currency in 2017, with some investors hopeful it will also prompt a more hawkish outlook from the European Central Bank (ECB) in 2018.

The Euro may be bolstered even further by the release of Germany’s latest employment figures later this morning as well, with analysts predicting that the jobless rate in the Eurozone’s largest economy will have fallen.

US Dollar News: USD Weakens as Investors Reflect on 2017

The Pound to US Dollar (GBP/USD) exchange rate stuck a new three-month high on Tuesday in the wake of the UK’s manufacturing PMI and a slip in US 10-year Treasury yields over the new year.

This is on the back of the US Dollar’s worst performing year since 2003, with the Dollar index slumping 9.8% since the start of 2017.

However, the US Dollar may be able to recoup some ground this afternoon with the release of the latest US ISM manufacturing PMI, although this in turn could be undermined by some potentially dovish minutes from the most recent FOMC policy meeting.

Canadian Dollar News: CAD Strengthens as Oil Pushes Over $60 a Barrel

The Pound mounted a recovery against the Canadian Dollar (CAD) yesterday as investors welcomed the robust UK manufacturing PMI.

The GBP/CAD pairing relinquished some of these gains later in the session, however, as Canada’s own manufacturing PMI impressed investors as it climbed from 54.4 to 54.7 in December, beating expectations of a modest decline.

Meanwhile, the unrest in Iran may further strengthen the Canadian Dollar over the next couple of day if it leads to firmer oil prices.

Australian Dollar News: Manufacturing PMI Helps GBP/AUD Rally from Initial Tumble

The Pound to Australian Dollar (GBP/AUD) exchange rate initially slumped in early trade on Tuesday before the UK factory PMI help Sterling to rally during the European Session.

The uptick in the Australian Dollar during the Asian session yesterday was mostly on the back of the US Dollar’s weakness and an uptick in commodity prices, with the Bloomberg commodity index closing 0.4% higher.

The strength of commodity markets may help the Australian Dollar strengthen again in the short-term, however the biggest influence on the currency is likely to be the release of Australia’s trade balance figures later in the week.

New Zealand Dollar News: GBP/NZD Climbs on the Back of UK Factory Data

The Pound New Zealand Dollar (GBP NZD) exchange rate rallied by nearly a cent after initially sliding yesterday, part in thanks to the UK’’s latest Manufacturing PMI.

However, the New Zealand Dollar was able to claw back some ground again during the afternoon following the latest Global Dairy Auction, with prices at the latest auction having risen 2.2% after previously tumbling 3.9%.

Looking ahead, a lull in notable domestic data at the start of the year may leave the New Zealand Dollar a little directionless for the remainder of the week, with movement in the currency likely to be driven by market risk appetite.

Upcoming Data

 

 

Wednesday, 03 January, 2018

 

08:55              DE Unemployment

09:30              UK Construction PMI

15:00              US ISM Manufacturing PMI

19:00              US FOMC Minutes

 

Thomas Taylor

Currency Dealer

01442 892 074

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