GBP - British Pound
Markets were flat yesterday with the US celebrating July 4th, independence day. Sterling’s docket was virtually empty and price action was muted. Cable stayed within a 15 point range for the day and GBP/EUR even tighter, within 10 points. Sterling’s hovering very close to 6 month lows across both pairs and data this week has highlighted these are worrying times for the quid. Brexit still has a strong hold on Pound advances so south seems to be the only way to go at the moment. On a more positive note, a forecast from Svenska Handelsbanken highlighted cable could be back at 1.33 by the end of the year. This could be another throw away forecast but its grabbed the attention as the bank is rated by Bloomberg as one of the pound's most accurate forecasters.
Not much to report on in other areas of the world. EUR/USD moved sideways between 1.1270 and 1.1295 and we saw Retail Sales for the Eurozone fall 0.3% for the month of May, this was the second consecutive fall, and highlights ongoing weakness in the euro zone economy. ECB Governing Council member and Finnish central bank governor Olli Rehn has said that “we should no longer see the recent slowdown in growth as a brief temporary dip in the economy, as a ‘soft patch’”. Adding “We are experiencing a longer phase of weaker growth”. He called on action by the ECB saying, “If we really want to live up to our mandate, further monetary stimulus is now needed until there is improvement in economic and inflation prospects”.
Attention now turns to the Non-farm release from the US today, alongside this we will see the monthly release of average earnings and the unemployment rate. With the possibility of a FED rate cut happening, today’s release could draw a lot of attention.
1.2530 - 1.2630 ▼GBP/EUR:
1.1120 - 1.1200 ▼GBP/AUD:
1.7850 - 1.8050 ▼GBP/NZD:
1.8720 - 1.8920 ▼GBP/CAD:
1.6350 - 1.6520 ▼