The Pound Dollar exchange rate initially found solid support on dips below the 1.63 GBP/USD level on Monday and pushed to a high in the region of 1.6350 GBP/USD before drifting weaker through the course of the day. The Pound Euro exchange rate did find support above 1.1850 GBP/EUR with a limited recovery from the retreat seen last week, as the 200-day moving average held firm. There will be important UK economic releases this week with the consumer inflation data this morning and the latest unemployment data on Wednesday.
The releases will be watched closely to assess underlying inflation and growth pressures both within the UK economy and on the Bank of England to adjust monetary policy. The recent improvement in the UK economic outlook had led to speculation that the Central Bank will raise interest rates sooner-than-previously-expected. The Governor of the BoE Mark Carney has been quick to quash such speculation and the MPC have adopted a more cautiously optimistic stance to the outlook. Therefore, the latest MPC minutes for the December meeting will be watched closely this week with some speculation that there will be references to the value of the Pound, which could undermine the currency.
Euro Exchange Rate Under Pressure on Mixed Euro Zone Readings
The Euro came under moderate selling pressure yesterday as there were mixed readings for the latest Euro-zone PMI data with a stronger-than-expected reading for manufacturing and a slightly weaker-than-expected reading for the services sector. There was a sharp decline for both French readings, maintaining a high degree of unease surrounding the economy and the medium term prospects, especially with rising political concerns. There was further speculation over capital repatriation within the European banking sector, especially with the forthcoming ECB stress tests and this had a significant impact in underpinning the Euro in the year-end period.
There was a solid Euro-zone trade surplus and the Euro pushed higher during the course of the day, as the Dollar again failed to generate any momentum. In the U.S, the latest New York manufacturing index was slightly weaker than market forecasts, but did improve from the previous month. There was a stronger reading for industrial production of 1.1%, from 0.1% previously and a robust reading for the latest manufacturing PMI index did underpin sentiment.
Data Released 17th December 2013
U.K 09:30 Consumer Price Index (November)
- RPI
U.K 09:30 Producer Price Index (November)
- Output
U.K 09:30 ONS/DCLG House Prices (October)
EU 10:00 Final HICP (November)
EU 10:00 Labour Costs/Wages (Q3)
GER 10:00 ZEW Economic Sentiment (December)
U.K 11:00 CBI Industrial Trends (December)
U.S 13:30 CPI (November)
- Ex Food & Energy
U.S 13:30 Real Earnings (November)
U.S 13:30 Current Account (Q3)
U.S 15:00 NAHB Homebuilders’ Sentiment (December)
Key Pound Sterling, Euro US Dollar Exchange Rates (12:00 PM GMT 17/12/2013)
The British Pound to Euro exchange rate is trading down -0.1% at 1.18319 GBP/EUR.
The British Pound to US Dollar exchange rate is trading down -0.12% at 1.62790 GBP/USD.
The Euro to British Pound exchange rate is trading up +0.1% at 0.84517 EUR/GBP.
The Euro to US Dollar exchange rate is trading down -0.02% at 1.37586 EUR/USD.
The US Dollar to Euro exchange rate is trading up +0.02% at 0.72682 USD/EUR.
The US Dollar to British Pound exchange rate is trading up +0.12% at 0.61429 USD/GBP.