Dear Subscriber, Please find below today's update which gives you an insight into the current market conditions, enabling you to keep informed and up to date on the latest currency movements. Headlines • UK Q2 GDP to be confirmed at 0.6% - Pound could rally if GDP prints higher.
• Eurozone Composite PMI hits 2-yr high - driven by robust German Manufacturing.
• US Jobless Claims rise to 336K - Manufacturing up to 5-month high.
• Canadian Retail Sales down -0.6% - GBP/NZD up 2.3 cents.
Sterling Apart from news that the number of British teenagers managing to get a C grade or above in their GCSE's fell for the second year running, there was little domestic data to contend with for Sterling traders yesterday…and some would even argue that this smidgen of information was not really relevant to the Pound's performance on the currency market! Later on this morning the UK second quarter growth print is likely to be confirmed at 0.6%, which is unlikely to either positively or negatively impact GBP. However, if Gross Domestic Product is revised higher it could send Sterling higher, conversely a growth downgrade could damage sentiment towards the UK currency. Euro The Euro rallied by around half a cent against the Pound yesterday as Eurozone data took another positive step. Thanks to a robust performance from the German private sector in August the Eurozone Composite PMI hit a 26-month high of 51.7 - smashing expectations of 50.9. Strong export orders allowed the German Manufacturing PMI to strike a 2-year high of 52.0 which, supported by a decent Service Sector score of 52.4, suggests that the Eurozone's most industrious economy has fully recovered from its winter blip around Christmas time last year. Business outlook is improving across the currency bloc and subsequently it is becoming increasingly likely that Eurozone GDP growth will improve upon Q2's 0.3% print in the third quarter. US Dollar Despite a worse-than-expected US Jobless Claims report the US Dollar continued to rally against the Pound yesterday as markets continued to price in the unyielding possibility of a slowdown to the Federal Reserve's QE3 programme. US Initial Jobless Claims rose from a 6-year low of 323,000 to 336,000 last week, however, the 'Greenback' was not punished because traders took heart from the fact that the four-week claims average fell to 330,500, which is the lowest level since November 2007. A separate report showed that US Manufacturing rose to a 5-month high of 53.9 in August as new orders accelerated optimistically, boding well for future performance. If Manufacturing output continues to expand then it will only support the Fed's outlook that asset purchases should be cooled down before the end of the year.
Canadian Dollar Sterling strengthened by around 0.2 cents against the Canadian Dollar yesterday as investors reacted acerbically to a worse-than-anticipated Canadian Retail Sales score of -0.6% for June. A labour strike in Quebec and a flood in Southern Alberta were identified as potential reasons for the below-forecast figure. With economic performance staling somewhat in the North American nation it is unlikely that the Bank of Canada will look to introduce an interest rate hike before the end of 2013.
Australian Dollar The Pound fell from a 3-year high against the Australian Dollar yesterday as Chinese Manufacturing data outperformed analysts' expectations. The 'Aussie' gained around 2.0 cents as the HSBC Chinese Purchasing Managers Index rose from 47.7 to 50.1, beating forecasts of just 48.2. The 4-month high Manufacturing print from the world's second largest economy boosted global risk appetite and stole the limelight from the Federal Reserve's cloudy Minutes report.
New Zealand Dollar The Sterling to New Zealand Dollar exchange rate yo-yoed higher and lower by around a cent yesterday as traders grappled between optimism from China and pessimism from the Federal Reserve. If you need any further assistance, or require a live dealing quote - please do not hesitate to contact me on 01736 335250 or send an email to info@torfx.com Regards,
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