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Sterling Steadies Ahead of UK Growth Report, US Data Remains Solid

Pound News: GBP Edges Higher Following Days of ‘No Deal’ Selloff

Profit taking took the Pound away from its worst levels on Thursday, with GBP moving away from multi-month lows against the Euro and US Dollar.

However, Sterling’s gains were ultimately limited. Investors hesitated to buy the Pound too much amid persisting concerns about the possibility of a ‘no deal’ Brexit becoming reality and uncertainty ahead of Friday’s UK growth reports.

Britain’s Q2 and June Gross Domestic Product (GDP) results will be published today, but even if they impress the Pound’s potential for gains is likely to remain limited on ‘no deal’ Brexit fears.

 

Euro News: ECB Caution Keeps Pressure on EUR

Most of the week’s GBP/EUR losses have been due to Pound weakness more than Euro strength, and Thursday’s European Central Bank (ECB) economic bulletin put some additional pressure on the shared currency.

The ECB once again issued warnings about the potential downside risks of US trade protectionism and tariffs. This was consistent with the ECB’s July policy decision, but still weighed on market appetite for the Euro.

French industrial production data will be published today, but this is unlikely to be hugely influential. Euro investors are more likely to anticipate next week’s key Eurozone growth and inflation figures instead.

 

US Dollar News: Trade Jitters Keep Safe Haven USD Resilient

Concerns that the US economy could be impacted by US trade protectionism or a potential trade war continue to have a muted effect on the US Dollar as investors bet that the US economy is currently strong enough to weather such issues.

Less people than expected signed up for US jobless claims in the latest jobless claims report, and the US Dollar was also supported by market demand for ‘safe haven’ currencies amid fresh concerns about US-China trade tensions.

This week’s most influential US data will be published today, in the form of US Consumer Price Index (CPI) inflation data from July. It is unlikely to have a big impact on the US Dollar unless it falls well short of expectations.

 

Canadian Dollar News: CAD Resilient Despite Trade Jitters

Despite worsening concerns about the US-China trade spat, other factors have kept the Canadian Dollar appealing and the Pound to Canadian Dollar exchange rate is on track to end the week much lower.

Investors are becoming more optimistic that progress is being made in North American Free Trade Agreement (NAFTA) renegotiations, and reassurance that Canadian oil trade would not be impacted by a Canada-Saudi Arabia diplomatic issue bolstered the Canadian Dollar further.

The Canadian Dollar could end the week even higher if today’s Canadian job markets results from July beat forecasts.

 

Australian Dollar News: US-China Trade Clashes Help GBP/AUD Rebound from Lows

After hitting its worst levels since January 2017 on Thursday morning, the Pound to Australian Dollar exchange rate rebounded and spent most of the European session climbing.

Investors sold the Australian Dollar from its recent highs in reaction to news that the US-China trade spat had worsened. China is Australia’s biggest trade partner, so this news left the Australian Dollar unappealing.

Developments in US-China trade clashes and the Reserve Bank of Australia’s (RBA) latest statement on monetary policy are likely to drive Australian Dollar movement today.

 

Upcoming Data

Friday, 10th August

02:30    RBA Statement on Monetary Policy

07:45    French Industrial Production

09:30    UK Trade Balance

09:30    UK Growth Rates

09:30    UK Industrial and Manufacturing Production

09:30    UK Business Investment

13:30    Canadian Job Market Report

13:30    US Inflation Rate

Jack Wiles

Currency Dealer

JSW@fcgworld.co.uk

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