UK manufacturing miss sees GBP/EUR, GBP/USD exchange rates decline
Carney confident of early 2016 interest rate adjustment but Pound falls against Euro, US Dollar
British Pound to Euro exchange rate news – GBP/EUR trending lower after Eurozone unemployment drop
The British Pound to Euro exchange rate softened on Monday as the UK Bank Holiday limited Sterling movement and the Euro was bolstered by steady inflation data for the Eurozone.
On Tuesday the GBP/EUR pairing consolidated and extended declines in response to the UK’s Manufacturing PMI falling short of forecasts and the rate of unemployment in the Eurozone falling unexpectedly.
The UK’s Manufacturing PMI had been expected to print at 52 in August, up slightly from July’s 51.9, but it actually came in at 51.5.
As it will take a series of upbeat UK releases to encourage the Bank of England to adjust borrowing costs, the report put the Pound under pressure.
Meanwhile, the Euro was boosted by a surprising drop in the level of joblessness in the Eurozone. The region’s unemployment rate was shown to have fallen from 11.1% to 10.9% in July, beating predictions for no change.
Tomorrow’s UK Construction PMI and Eurozone Producer Price Index could inspire further GBP/EUR movement ahead of Thursday’s influential UK Services PMI and European Central Bank (ECB) interest rate announcement.
The British Pound to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3605
British Pound to US Dollar exchange rate news – Conflicting rate speculation doesn’t stop ‘Cable’ from hitting two-month low
Over the weekend Bank of England (BoE) Governor Mark Carney expressed confidence that the impact of the developments in China on the UK would be sufficiently limited to still warrant an increase in borrowing costs in the first quarter of next year.
At the same time, several Federal Reserve officials indicated that a US rate adjustment in 2015 might be off the table given the global economic climate.
However, despite these conflicting remarks the British Pound to US Dollar exchange rate tumbled to a two-month low and remained trending around this level ahead of the release of the US ISM Manufacturing Index and Construction Spending reports.
Additional GBP/USD volatility can be expected this week as the US releases its highly influential ISM Non-Manufacturing Composite figure and Non-Farm Payrolls report.
The British Pound to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5320
Euro to US Dollar (EUR/USD) exchange rate news – Euro gains on positive Eurozone data
The Euro to US Dollar exchange rate advanced on Tuesday as investors responded positively to the Eurozone’s unemployment report.
The decline in joblessness took the region’s unemployment rate to an over three-year low.
According to the Financial Times; ‘The drop in unemployment comes after data today showed the manufacturing sector continued to expand in August, although it follows disappointing second quarter GDP data that showed the Eurozone’s largest economies grew less than economists had expected. The lowest rates of unemployment in the EU were 4.7% in Germany and 5.1% in the Czech Republic and Malta. Meanwhile the highest rates of unemployment were 25% in Greece and 22.2% in Spain.’
However, if the European Central Bank (ECB) uses Thursday’s interest rate announcement to hint that easing could be expanded to bolster domestic inflation the EUR/USD exchange rate is likely to reverse today’s gains.
The Euro to US Dollar (EUR/USD) exchange rate was trending in the region of 1.1258.