Sterling Softens on Disappointing Production Data

Sterling fell around 0.3% against both the dollar and the euro on Friday as Industrial and Manufacturing Production disappointed economists’ expectations. Sterling-dollar fell to its lowest levels since 28 June.

Previous Day's Market Highlights

Sterling fell around 0.3% against both the dollar and the euro on Friday as Industrial and Manufacturing Production disappointed economists’ expectations. Sterling-dollar fell to its lowest levels since 28 June.
 
In the afternoon, the dollar briefly fell despite an above-forecast NonFarm Payrolls figure, which saw the US adding 222K jobs to the economy in June. Wage growth was flat at 2.5% year-on-year and 0.2% month-on-month, which weighed on the dollar. The Fed watches the pace of inflation and the strength of the labour market, including wage growth.  
 
The Canadian dollar gained in the afternoon on the back of above-forecast employment data. The Unemployment Rate fell to 6.5% from 6.6%. Sterling fell to a nearly two-month low against the loonie. 

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.1310 1.1469 1.1261 1.81%
GBP / USD 1.2893 1.3031 1.2589 3.39%
EUR / USD 1.1399 1.1446 1.1119 2.86%
GBP/AUD 1.6954 1.7107 1.6612 2.89%
GBP / NZD 1.7714 1.7881 1.7338 3.04%
GBP / CAD 1.6615 1.7172 1.6564 3.54%

Today's Market Highlights

The calendar is quieter this week. Highlights for the UK include Wednesday’s employmentdata and the publication of the Repeal Bill on Thursday. Debate around and amendments of the bill may cause volatility in the pound, although it is ultimately expected to pass. In the US, attention will largely be on Fed Chair Yellen’s testimony on the Semiannual Monetary Policy Report, as well as June Retail Sales and CPI data.
 
Looking further ahead, the ECB meets 20 July and its wording on inflation will be closely watched after a recent increase in speculation that the Bank is becoming more hawkish. The Fed meets 26 July and is not expected to change policy, but markets will keep an eye on to what degree it considers softer inflation a risk to a possible third hike later this year. 

Today's Economic Calendar

Time Currency Release Consensus Previous
15:00 USD Labor Market Conditions Index (Jun) 2.5 2.3
20:00 USD Consumer Credit Change (May) $12.7B $8.2B
00:01 GBP BRC Like-For-Like Retail Sales YoY (Jun) 0.5% -0.4%
02:30 AUD Home Loans (May) 1.5% -1.9%