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 Construction PMI up to near 6-yr high – better-than-expected print boosts Sterling.
• US ISM Manufacturing strikes 2-yr high – US data impresses but GBP/USD holds firm.
• BoC interest rate decision on tap – 1% rate forecast to be maintained.
• RBA holds rates at 2.5% – neutral tone boosts 'Aussie'. Sterling Sterling fared well on the currency markets again yesterday as another outstanding UK PMI score reflected excellently on the British economy. The Construction Purchasing Managers Index struck a near-6-year high of 59.1, outperforming expectations of 56.9, as British building companies reported that client spending increased across the board. The August PMI, the highest since September 2007 when the Northern Rock bank run rocked financial markets, is another example of the veracity of the UK's recent economic renaissance. If this morning's Service Sector PMI report completes the hat-trick of glittering August data the it is entirely possible that Sterling could mount a series of meaningful rallies against its global currency peers. Euro The Pound climbed to a fresh 3-month high against the Euro yesterday in response to a robust UK PMI results. Although the Eurozone, as a collective economic force, is starting to show some realistic signs of recovery the story is very different in some areas of the currency bloc. Spain, the 17-nation bloc's fourth largest economic might, remains mired in recession and with a generation of workers who were seduced into the previously lucrative, but now defunct, Construction Industry struggling to make ends meet, cracks are continuing to form in the social fabric. Yesterday it was reported that a modern-day band of Robin Hood-esque left-wing merry men went on a stealing spree to provide school supplies for hard-up Spanish children in the city of Sevilla. This particular news item makes it especially puzzling to hear that Spanish football club Real Madrid have already paid their new marquee signing Gareth Bale over £80,000 in the two days that he has been at the club. NB, They haven't actually paid Bale that much yet, but that's how much he's earned without even playing a match. US Dollar Sterling strengthened by around half a cent against the US Dollar yesterday morning in a knee-jerk reaction to the rapid acceleration of the UK Construction Sector during August. However, GBP/USD levelled out almost instantly after running into technical resistance in the region of 1.5600. During the afternoon it was reported that the American Manufacturing Sector expanded at its fastest pace since June 2011 during August. The 2-year high US ISM print of 55.7, massively overshot forecasts of 54.0 as the New Orders component of the report surged to an impressive peak of 63.2. US Prices Paid beat expectations of 51.2, coming at 54.0, and Construction Spending printed two percentage points higher-than-forecast at 0.6% but the positive dataset was unable to persuade investors out of the Pound and into the 'Buck'. Canadian Dollar The Pound to Canadian Dollar exchange rate remained fairly static yesterday as some impressive American economic indicators largely cancelled out the effect of robust UK data. The 2-year high US Manufacturing score boosted the 'Loonie' because it was seen to pre-empt a flourishing trade relationship between the two North American nations. Later this afternoon the Bank of Canada is to announce its benchmark interest rate for September. The BoC is widely expected to maintain the current rate of 1.00% and accordingly volatility is likely to be fairly muted. Australian Dollar The Australian Dollar jumped higher by over 1.2 cents against the Pound yesterday as 'Aussie' traders breathed a sigh of relief following the RBA's latest policy decision. The Reserve Bank of Australia opted to keep rates at the current record low level of 2.50%, striking a relatively neutral tone in the process. Having cut rates eight times in the last two years the RBA was reluctant to act further and this cheered traders of the Australian Dollar. The 'Aussie' also benefitted from a better-than-expected 0.6% Q2 domestic GDP print earlier this morning. New Zealand Dollar Sterling advanced by just over a cent against the New Zealand Dollar yesterday as unfaltering UK Construction numbers, and further concerns surrounding the military conflict in Syria, acted to send GBP/NZD higher.
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