Sterling recovered a little today following some slightly better than expected Construction numbers this morning. It’s helped GBPEUR rise slightly, however GBPUSD is being kept under pressure due to a stronger US Dollar. (View live interactive charts).
Tomorrow morning we see UK Services. Services form the majority of UK economic output, so the numbers are important. We expect a reading of 53.5. Anything above 50 signals expansion, and if the actual result is higher or lower, the Pound is likely to move accordingly…..
Pound/Euro, what next?
If you need to buy or sell Euros, you should also watch for tomorrows EU data. Today we had EU GDP and jobs numbers, but they were ‘as expected’ and so didn’t alter the value of the Euro much. Tomorrow’s EU data includes inflation and various speeches by ECB members. If this data supports the case for a tapering of EU stimulus, the Euro could strengthen. Conversely if the markets think that stimulus is likely to continue in Europe for some time, then it could help push Pound/Euro rates back up and recover some of this week’s losses. Get GBPEUR quote.
Pound/Dollar, FED decision to affect USD?
Despite a gain for Sterling today, GBP/USD rates remain around the lowest they have been all year. This can be attributed to a stronger USD. This evening at 7pm the FED will announce their interest rate decision. I think that they’ll leave rates on hold at 1.75%. There is no press conference scheduled, which in my view makes it likely there will be no change. We do however expect further rate hikes this year from the FED, and this could cause the Dollar to strengthen further.
Also of note for those watching GBPUSD rates will be Friday’s Non-Farm Payrolls numbers. This measures the number of new jobs created, excluding the agricultural sector as it’s seasonal. The expected number is 198,000 new jobs. However, this particular release is nearly always significantly different to what analysts expect due to that fact it’s so hard to predict. So any higher number would send GBP/USD lower, and a lower figure would weaken the USD, sending GBPUSD back up. The release is due at 13:30pm. Get GBPUSD quote.
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