Pound steadies despite P45 for PM Theresa May

After a bit of a shocking start to the week the pound managed to stabilise against its peers yesterday.

GBP/EUR is currently trading in the region of €1.1249, GBP/USD is lingering around $1.3232, GBP/AUD has gained 0.5% to achieve a high of AU$1.6923, GBP/NZD is on the cusp of NZ$1.8500 and GBP/CAD is trending around the day’s opening levels of C$1.6521.

What news will be driving the major currencies today? Read on to find out…

What’s been happening?

After being kicked lower by poor UK manufacturing and construction figures earlier in the week, the pound was able to eke out modest gains on Wednesday after the all-important services PMI beat forecasts.

The measure of the services sector rose from 53.2 to 53.6, prompting this response from IHS Markit economist Chris Williamson;

‘The services sector saw another month of modest growth, running in the middle ground between the robust expansion seen in manufacturing and the contraction recorded in construction. The three PMI surveys put the economy on course for another subdued 0.3% expansion in the third quarter, but the fourth quarter could see even slower growth.’

The pessimistic assessment of the UK’s future growth prospects prevented the pound from gaining too much on the back of the report.

Headlines were also dominated by the news that Prime Minister Theresa May was presented with a P45 during a speech at the Conservative Party Conference in Manchester.

The PM was accosted by comedian Lee Nelson, who handed May the P45 and asserted that ‘Boris asked me to give you this’.

Elsewhere, the euro was undermined by a disappointing Eurozone retail sales report. The US dollar, on the other hand, fluctuated in response to rumours that a dovish Fed official would be taking on the role of Chairman after Janet Yellen’s term ends, while the US ISM services measure surged to a 12-year high.

The pound was able to gain on the Australian dollar overnight as Aussie retail sales slumped by -0.6% in August rather than climbing the 0.3% expected.

What's coming up?

With no big-ticket news items on the calendar for the UK until this evening’s BoE speeches, Sterling is more likely to fluctuate in response to global economic developments.

The GBP/EUR exchange rate may experience volatility following the release of retail PMIs for the Eurozone and its largest economies. The European Central Bank (ECB) is also set to publish the account of its latest monetary policy meeting.

Over in the US we’ve got trade balance, factory orders and durable goods orders figures to focus on, as well as speeches from several Federal Reserve officials.

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.