Continued Sterling strength ahead of Average Earnings Data

Cable comfortably pushed through 1.4000 during afternoon trading, with GBP/EUR reversing earlier losses due to upbeat Eurozone Economic Surveys.

Previous Day's Market Highlights

Sterling opened on relatively high level yesterday before falling off throughout the day. The pound remained in touching distance of 1.14 on the EUR and opened just below the 1.40 mark on USD. EUR/USD remained confined to its week-long 1.2150 to 1.2300 range, despite a further day of government shutdown in the US, it remains bound at this resistance. Yesterday’s German ZEW business sentiment came out as a very positive figure at 10:00 (20.4 against 17.8 forecasted) which may have helped push further gains in EUR/USD. European Consumer Confidence index at 15:00 came in at 1.3 against a 0.6 forecast; although it had little effect on the markets.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1390 1.1412 1.1197 1.90%
GBP/USD 1.4032 1.4046 1.3331 5.09%
EUR/USD 1.2317 1.2327 1.1817 4.14%
GBP/AUD 1.7487 1.7552 1.7098 2.59%
GBP/NZD 1.9043 1.9217 1.8613 3.14%
GBP/CAD 1.7406 1.7476 1.6757 4.11%

Today's Market Highlights

The economic calendar today consists of Flash manufacturing and Services PMI data for France, Germany and the U.S. From the UK, the main release will be unemployment and average earnings figures. These will be released at 09:30. This data is important as it paints a larger picture of the British economy. As the prices of goods and services is rising, average wages aren’t matching this trend, leaving a large gap which could start to damage the economy. In the long term, this could affect the Bank of England’s decision to raise interest rates. This would be detrimental for the strength of the Pound.


Caxton