3-week low for GBP/EUR

Last week was pretty rough for the pound, with the British currency recording significant losses against its main currency counterparts.

Over the course of five days the GBP/EUR exchange rate fell from €1.1356 to €1.1122, GBP/USD hit a one-month low of $1.3032, GBP/AUD eased from AU$1.7085 to AU$1.6769, GBP/NZD fluctuated between NZ$1.8622 and NZ$1.8386 and GBP/CAD fell by almost 4 cents to a low of C$1.6357.

What’s coming up today? Read on to find out…

What’s been happening?

Last week’s unfortunate UK construction and manufacturing data left the pound floundering amid concerns that economic output remained tepid in the third quarter.

Sterling also came under pressure as a result of PM Theresa May’s speech at the Conservative Party Conference.

May’s speech was beset with issues, from a persistent cough to the presentation of a P45 by comedian Lee Nelson.

While some MPs applauded May for soldiering on, others asserted that it was time for a change of leadership.

Concerns that May could be ousted as Prime Minister – an event that would create great political uncertainty and could prevent Brexit negotiations from progressing – contributed to the pound hitting a 3-week low against the euro and 1-month low against the US dollar.

Meanwhile, the euro remained fairly sturdy despite speculation about the repercussions of the Catalonian independence referendum, while the US dollar shrugged off Friday’s disappointing US non-farm payrolls report amid bets the less-than-impressive employment numbers won’t prevent the Federal Reserve from increasing interest rates in December.

What's coming up?

Sterling has had a fairly positive start to the week so far, climbing by over 0.3% against all the majors as it recovers slightly from its worst levels.

With no UK news on the calendar today, any further pound movement is likely to be the result of political developments.

Eurozone news to watch out for includes the region’s Sentix investor confidence measure and a speech from the European Central Bank’s (ECB) Lautenschlaeger.

More interesting ecostats are set for publication later in the week, with tomorrow’s UK manufacturing/industrial production and construction output numbers having the potential to spark GBP volatility.

Concerning stats could send the pound sliding to new lows.

We’re here to talk currency whenever you need us, so get in touch if you want to know more about the latest news or how it could impact your currency transfers.

Phil McHugh,
Trading Floor Manager

Phil provides dealing and hedging services whilst also helping to manage Currencies Direct overall market exposure.