The pound trended higher against the euro yesterday as the single currency was pressured by reports that Italy’s next budget could be delayed.
Meanwhile Sterling is trading in a narrow range this morning, with GBP/EUR stable at €1.1246, GBP/USD flat at $1.3067 and GBP/CAD muted at C$1.7007, while both GBP/AUD and GBP/NZD hold steady at AU$1.8111 and NZ$1.9780 respectively.
Looking ahead, the euro will remain in focus this morning, with the publication of the Eurozone’s latest CPI figures.
What’s been happening?
The pound was left to tread water yesterday as a lull in impactful domestic data and an unusually quiet day in terms of Brexit news saw the currency struggle to find any momentum.
The GBP/EUR exchange rate was one of the few Sterling pairings to edge higher on Thursday as the euro was pressured by renewed concerns regarding Italy’s upcoming budget.
This was prompted by media reports that Italy’s next budget could be delayed as the ruling parties clash over the size of the budget deficit.
Meanwhile the GBP/USD exchange rate fell back yesterday as US durable goods orders were shown to have rebounded more strongly than expected in August, with order growth soaring from -1.2% to 4.5%.
What’s coming up?
The UK will publish its final second quarter GDP reading this morning, potentially helping to buoy the pound in early trade should the data confirm the UK economy expanded by a reasonable 0.4% in the three months to June.
At the same time the release of the Eurozone’s latest CPI figures could help to bolster the euro this morning as economists forecast the flash reading will show both headline and underlying inflation tick higher in September.
Finally the Federal Reserve’s preferred measure of inflation, the US PCE Price Index, is expected to have risen in August, potentially lending some strength to the US dollar this afternoon as it bolsters the chances of the Fed pursuing four more rate hikes over the coming twelve months.
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