Busy Day for Data Could Cause Movement for Pound Sterling (GBP), US Dollar (USD) and Euro (EUR) Exchange Rates
The Pound (GBP) exchange rate will have the chance to recover ground on Thursday if the latest UK retail sales data show that consumer spending in the nation remains strong and supports expectations for the Bank of England to raise interest rates before the end of the year.
On Wednesday the Pound lost ground against most of its major peers after the minutes for the Bank of England’s July policy meeting caused investors to pare back their bets for a rate hike.
Concerns over recent weak wage growth data stayed board members hands and led to unanimous vote in favour of leaving rates unchanged at the record low level of 0.5%.
Some investors however now believe that August’s policy meeting will see policy makers begin to vote in favour of a rate hike.
The US Dollar meanwhile could receive some support if the latest continuing and initial jobless claims data comes in strongly for the weeks ending on the 7 and 14 of July.
Also due for publication is the newest Markit Manufacturing PMI Flash data which is widely expected to show an improvement on the previous month.
New Home sales data could also lend the ‘Greenback’ some support. Positive data widely increase speculation that the Federal Reserve will raise interest rates sooner than initially expected.
Following Wednesday’s poor consumer confidence report for the Eurozone the single currency remains under heavy pressure.
The flash consumer confidence index for Eurozone fell to -8.4 from -7.5 in June. Economists had forecast the score remain unchanged.
Demand for the Euro has waned in recent weeks as the policy of the European Central Bank looks set to diverge from other major central banks.
The Euro will fall further if Thursday’s Markit compiled Manufacturing PMI and Services PMI data comes in below expectations. A weak showing from Germany and France will also weigh.
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