Poor Week For Sterling
Quote of the day: “Don’t be afraid to give up the good to go for great”
September 2nd: Highlights
- Poor start to the week for Sterling
- Disappointing manufacturing data driver for GBP weakness
- China causing uncertainty in currency markets
- Australian Dollar hit by China slowdown
Yesterday saw disappointing manufacturing PMI data, with results coming in below forecasted 51.9 at 51.5. GBP/USD opened yesterday at 1.5386, briefly bouncing off the resistance of 1.5400, hitting a low point of 1.5298 before eventually closing up at around 1.5345. GBP/USD is currently trading around 1.5284.
GBP/EUR opened yesterday at 1.3606, dipping to a morning low of 1.3559 before bouncing back to over 1.36 at the close of trade. Currently, the pair is trading down at 1.355
Earlier this morning data showed that the UK’s construction sector grew at a faster pace in August. Construction firms produce over 6 percent of the total UK economic output and employs over two million people. The sector benefitted from lower input costs largely due to cheaper supply of energy.
China’s immense manufacturing industry contracted, worrying investors following a disappointing report that was released yesterday. Shanghai’s major stock index lost one percent whilst shares in Tokyo lost almost four percent. China’s official manufacturing index has fallen to its lowest levels since 2012.
Japan’s foreign minister Tara Aso recommended yesterday that the Chinese economy should be the main item on the agenda at the upcoming G20 meeting of the major economies.
EUR/USD opened yesterday at 1.1308, hitting brief highs of 1.1332 before closing at around 1.1250. This morning the pair is trading at around 1.1265. The Eurozone’s jobless rate fell to its lowest level in three years. It’s the first time the unemployment rate in the Eurozone has been below 11% since February 2012. The jobless total in Italy fell by 143,000.
Canada’s economic output dropped in Q2 on a sharp drop in business investment, adding to the notion that the country fell into a recession in the first half of the year. GBP/CAD is trading around 2.0265.
The Australian dollar dropped below US$0.70 for the first time in over six years this morning, principally caused by concerns by the shockwaves we’re seeing spread from China and dissapointing GDP data. GBP/AUD is currently trading around 2.1819.
Have a great day!
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