Pound slips back on UK manufacturing growth
5 September, 2017
The Pound slips back a little against the Euro and US Dollar yesterday, after slightly worse than expected UK manufacturing growth figures in the morning, which were the day’s only UK data of note. The Euro did weaken after producer inflation in the single currency bloc also came in lower expected at 10am, but still finished the day more expensive against the Pound then the close before the weekend.
The week gets busier today, Eurozone services growth at 9am, followed by Eurozone retail sales at 11am. Both could have an influence on Euro rates, so Euro buyers might want to watch for any spikes caused by weaker figures when the numbers are released. This afternoon we head across the pond and have US factory orders at 3pm, with 2 speeches by members of the FOMC, which decides US interest rates, due this evening.
This morning we have already seen Australian interest rates kept on hold at 1.5%, with Reserve Bank Governor Philip Lowe due to speak at 10.10am UK time and Australian GDP released overnight tonight, all of interest if you need to send money to Australia. Swiss consumer inflation was also released at 8.15am, which came in on expectation, although poor GDP figures earlier this morning have made the Swiss Franc slightly cheaper.
Barnier tones down Brexit remarks
EU chief negotiator Michel Barnier also toned down his weekend Brexit comments, claiming that he had been misquoted in saying the UK “must be educated” about the cost of leaving the EU. In a Tweet he explained that it “was an occasion of great explanation for everyone in the EU”, and not meant as a threat to punish the UK. However the comments hardly helped EU-UK relations, and with sterling particularly sensitive to further Brexit uncertainty, the negotiations’ development is not helping those of you who currently need to send Euro payments. Brexit Secretary David Davis is due to brief the House of Commons today.
Looking further ahead, Prime Minister Theresa May is rumoured to be preparing a major speech on Brexit for later this month, before the Conservatives’ conference. If true the speech could be a pivotal moment in Mrs May’s premiership, and in her ambition to lead the party through to the next General Election. If she doesn’t survive through conference season, and a new Prime Minister emerges mid-negotiation with the EU, we could easily see the Pound slips back further into even more serious trouble than it is now.
Brexit talks are due to continue later this month, although the government has suggested that rolling, instead of monthly, talks might be productive, which may alter political and therefore market sentiment. While there are so many factors influencing exchange rates currently, make sure you don’t miss out and contact the friendly team at Currency Index to discuss the options for your own foreign currency payments on 0800 043 2623.
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