Good morning, please see today’s entry to our Daily FX Market Commentary.
Yesterday saw the USD press back slightly against the GBP, but the movements were not particularly wild. The top of the day was 1.4260 and the low of the day came in at 1.4180 and after some back and forth, this is largely where we stayed.
We didn’t see much data come through for the States yesterday so other factors came into play to guide the rate . Today is much the same and there are sundry items to be received from the States but not particularly market moving stuff. Look to the other side of currency conversions for clues on where the rates are going as well as larger factors that continue to bubble away, like interest rates etc.
The EUR received it’s GDP data release yesterday and it’s interesting reading. Overall, the GDP is up and came in at 1.6% (so higher than predicted) but the economy did grow less quickly in the last 6 months of the year. There are pockets of reductions of growth (e.g. household spending) and some pleasing areas where the figures perked up (e.g. total investment).
However, it is unlikely to stave off any plans to continue to add additional support to the economy through the European Central Bank policies. Announcements to add more money through the economy are still expected and this means that the currency did not appreciate as boldly as you might have thought.
The EUR did surge strongly, but then lost almost all of the gains inside a few hours. At the moment we are trading at 1.2950
We are just about to learn about the UK’s industrial and manufacturing production situation, which is forecast for improvement across every element tested – so could get an early nudge in the strength of the GBP this morning.
Yesterday we listened to a speech from Bank of England Governor, Mark Carney. He talked about the potential British exit from the Eurozone and commented that the square mile would lost business in his view if we voted to leave and certain measure weren’t taken to ensure continuity. He also commented that he thought that leaving would be a short term blow to growth, the currency and also foreign investment.