Sterling has had a tough couple of weeks, slowly slipping away from its peaks seen in July with an absence of supporting data. Sterling had lost 2 cent against the Euro and 3 cents against the Dollar at Friday’s close and looked toward further PMI data this week for a recovery. Figures have not disappointed with construction PMI coming in better than expected yesterday and this morning the Services PMI figure was up to 59.1 from 57.7 last month, and much better than the forecast figure of 57.9.
The Euro-zone PMI figures were however worse than expected despite an increase from previous months with the Services figure now at 54.2, therefore still demonstrating growth in the sector. Retail Sales figures were much better with the year on year growth improving to 2.4%, up from just 0.6% last month and much better than analysts’ expectations. The Euro however remains out of favour as it lost ground against both the pound and against the rejuvenated US Dollar.
The US Dollar was further boosted in afternoon trading after a succession of positive releases. Services PMI came in as expected with a strong growth figure of 60.8, factory orders were up significantly in the last month and the ISM Non-manufacturing PMI result was much better than forecast as 58.7, up from 56 in June.
Overnight New Zealand have announced their latest unemployment figures which posted a drop to 5.6% on the headline rate. The markets however seemed to be focussing more on the quarterly Employment Change figure which fell short of the 0.7% predictions with a real figure of just 0.4%. After some initial volatility the Kiwi Dollar weakened after announcements providing the best buying levels since February against the pound.
Today again focuses on the UK with Industrial & Manufacturing Production data to be announced at 9:30am. With the rest of today’s calendar being very quiet, sterling exchange rates will be driven by this result so keep a close eye should you have an imminent currency transfer.