UK construction data out yesterday pushed the pound onward and upwards when it was revealed that the UK’s construction industry grew at its fastest pace for four months, and that construction companies are hiring staff at their fastest pace since 1997. This is one of the contributing factors to the fact that we’ve seen GBP hit its best rate against EUR in 21 months, and the same against USD against which the pound is at an almost 6 year high. We also saw a Nationwide report that showed that house prices in the UK are above the peak achieved in 2007 having seen an 11.8% increase year-on-year.
In Europe, poor PMI numbers for Germany and Italy contributed to EUR taking a dip (along with the dominating British pound). Germany did, though, have a drop in unemployment levels which did help in restricting the euro’s decline. EUR’s fortunes weren’t helped much either by the French Prime Minister’s comments that the ECB may need to devalue the currency because it is currently “overvalued” which is bad for growth prospects and industry output. The European Central Bank, at its meeting today, is widely expected to keep things the interest rate as is.
USD was able to give GBP a little run for its money yesterday following an ADP report that showed that US businesses added more employees than expected – an indicator that the US economy is on the up – the highest reading since 2012. May’s factory orders were disappointing, though, coming in at -0.5% as opposed to 0.8% in April, stifling the dollar somewhat. Today has huge potential to be USD positive with the release of non-farm payrolls; a day earlier than the traditional first Friday of every month due to Independence Day in the US tomorrow. The forecast stands at 213k, short of previous, however a positive number here is not out of the question considering the very good ADP numbers yesterday. We will also see the release of Average Earnings and the Overall Unemployment Rate in the US, along with Trade Balance. Slightly later in the day we look out for Markit Services and Composite PMI along with ISM Non-Manufacturing.
FC Exchange is a trading name of Foreign Currency Exchange Limited. Registered office: Salisbury House, Finsbury Circus, London, EC2M 5QQ. Registered No.5452483. Authorised by the Financial Conduct Authority (No.511266) under the Payment Service Regulations 2009 for the provision of payment services. HM Revenue & Customs MLR No.12215508. Copyright © 2013 Foreign Currency Exchange. All Rights Reserved.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.