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The euro strengthened yesterday
Published: 25 Jul at 9 AM Tags: Pound Sterling, Euro Exchange Rate, Dollar Exchange Rate, Australian Dollar Exchange Rate, New Zealand Dollar Exchange Rate, Canadian Dollar Exchange Rate, Euro Crisis, UK, Economy,
The euro strengthened across the board yesterday on the back of much better than expected data.
The Markit euro zone manufacturing sector purchasing managers´ index surprised on the upside with a rise from last month’s reading of 48.8 to 50.1 in July, well ahead of the consensus expectations for a gain to 49.1. In addition, the euro zone services sector gauge also improved from 48.3 to 49.6.
The high yielding currencies were sharply down yesterday with over 1c losses for both the Australian and New Zealand dollars on the back of a further drop in Chinese factory output for the fourth month in a row.
Other than against the high yielding currencies, the pound struggled yesterday mainly on the back of a report from Goldman Sachs who see a near 50% chance that the Bank of England could announce a change in its long standing policy at its policy meeting in early August in addition to implementing the policy of forward guidance’ on UK interest rates as proposed by new Governor Mark Carney. Carney successfully implemented a policy of ‘forward guidance’ during his days as governor of the Bank of Canada with excellent results for the Canadian economy.
Today sees the publication of the preliminary GDP data for the UK for the three months to June. After some better than expected data from the UK construction, manufacturing and services sectors, with decent data out also from the retail sector and the UK property market, analysts are expecting the data to show a pick-up in UK GDP from 0.3% in the three months to March to 0.6% for the three months to June. Any figure below the consensus estimate of 0.6% should put further downward pressure on the pound.
In the US, data showed that existing home sales rose to an annualised rate of 497,000 in June, well ahead of the expected target of 476,000 units.
In addition, the Markit purchasing managers´ survey for the US manufacturing sector for July came in at 53.2, up from a reading of 51.9 for June.
The Markit euro zone manufacturing sector purchasing managers´ index surprised on the upside with a rise from last month’s reading of 48.8 to 50.1 in July, well ahead of the consensus expectations for a gain to 49.1. In addition, the euro zone services sector gauge also improved from 48.3 to 49.6.
The high yielding currencies were sharply down yesterday with over 1c losses for both the Australian and New Zealand dollars on the back of a further drop in Chinese factory output for the fourth month in a row.
Other than against the high yielding currencies, the pound struggled yesterday mainly on the back of a report from Goldman Sachs who see a near 50% chance that the Bank of England could announce a change in its long standing policy at its policy meeting in early August in addition to implementing the policy of forward guidance’ on UK interest rates as proposed by new Governor Mark Carney. Carney successfully implemented a policy of ‘forward guidance’ during his days as governor of the Bank of Canada with excellent results for the Canadian economy.
Today sees the publication of the preliminary GDP data for the UK for the three months to June. After some better than expected data from the UK construction, manufacturing and services sectors, with decent data out also from the retail sector and the UK property market, analysts are expecting the data to show a pick-up in UK GDP from 0.3% in the three months to March to 0.6% for the three months to June. Any figure below the consensus estimate of 0.6% should put further downward pressure on the pound.
In the US, data showed that existing home sales rose to an annualised rate of 497,000 in June, well ahead of the expected target of 476,000 units.
In addition, the Markit purchasing managers´ survey for the US manufacturing sector for July came in at 53.2, up from a reading of 51.9 for June.
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Source: moneytransfer.co.uk