GBP rate drop continues

Yesterday saw rates for GBP suffer as it lost over half a cent against the Euro and nearly a cent against the Dollar. Whilst the UK did post lower than expected PMI construction this was however against a raft of poor data from the Eurozone including German Markit services and retail sales for Europe. This could be as a result of it following poor GDP figures from the UK last week and manufacturing figures yesterday which showed contractions across the board. In the afternoon the US posted positive non-farm productivity figures giving it strength, which could also be an indicator for a good reading Friday, when they release the headline Non-farms report.

Despite the strong US data and weak Euro data, USD/EUR closed almost exactly where it opened on the day’s trading. At present sentiment seems to certainly be playing its part as weak data from the Eurozone seems to be having very little effect on the single currency whereas poor data for the UK is weighing heavily on the pound. This is a clear sign of the volatility and increased pressure the pound finds itself under with the upcoming referendum vote, and would suggest in the interim a downward trend will likely to continue as this will only increase as we approach June 23rd.

Elsewhere in the world we have seen AUD strengthen by nearly a cent against the pound as they posted retail sales better than expected. This may be welcomed given the recent weakening after they cut their interest rate on Sunday by 25 base points which was a surprise move given that inflation had only just dipped into the negative last week.

Today is a relatively quiet day in the way of data with the EUR Economic Bulletin report from the ECB dominating releases in the morning and US jobless claims in the afternoon. We do have the UK mayoral elections which also may have an affect once the results are announced, particularly as Boris came out to publically back the Brexit.

However given the current Euro strength amidst poor data and the current struggling pound, don’t be surprised if we continue to see rates drop today regardless of what happens data -wise. So if you have any upcoming Euro purchases speak to your currency index broker today for some friendly and professional guidance on how to get the most out of your transfer.