Poor Euro data allows Pound to make gains USD strong amidst confidence boost

31 August, 2016

Matthew Boyle

Yesterday saw a busy start to the week in terms of ecostats. In the morning we saw the UK release consumer credit and mortgage approvals data, both of which showed a downturn and came in under what was expected – perhaps unsurprising given the recent string of poor result post Brexit. As a result in the early mornings trading the Pound started to lose ground, however any losses were short-lived as a raft of data was released from the Eurozone with all of the headline figures coming in well under what was estimated. Services sentiment, industrial confidence, business climate and Economic services indicator data all provided poor results. And this was only made worse at midday when German inflation figures were released – down to 0.4% from an expected 0.5%. In what was a bad morning for both the pound and the single currency it was the Euro that outperformed in terms of poor figures and as such throughout the day it allowed GBP to gain around half a cent against the struggling single currency.

It was the USD that was the winner of the day from the 3 major currencies. In the afternoon’s releases despite showing a slightly lower figure in House price indices data, consumer confidence was up from a predicted figure of 97 to an actual reading of 101.1. This combined with the current fairly bullish outlook from the FED ahead of a predicted interest rate hike maybe as early as next month saw the USD strengthen throughout the day, gaining around half a cent against the poorly performing Euro, and stealing back minor losses against the pound in the morning.

Today is another busy day in the way of Ecostats, with the Euro taking centre stage. In the morning we have UK house prices data, and in the afternoon employment and house sales data from the US. However the days focus will be largely on the Eurozone as we see German unemployment, Eurozone unemployment rate and also inflation data released. With the UK recently cutting interest rates and article 50 yet to be invoked, the Eurozone hinting at potential further Q.E and all the while the FED hinting at raising interest rates further, this inflation release will be keenly watched, and no doubt the next few months will be a busy one. Should you have any upcoming requirements give your Currency Index broker a call today for some friendly and professional advice on how to avoid any costly movements in the rate.