Sterling Holds despite Poor Data, Euro Declines on Geopolitics and US Dollar Bearish after Soft Data

Published: 3 Jun at 9 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Greece,

Pound Sterling (GBP)
After gaining in response to Tuesday’s positive domestic data, the Pound is holding steady versus its major peers – despite the latest UK data being less inspiring. On the year, the BRC Shop Price Index declined by -1.9% in May; a larger contraction than the median market forecast -1.8%. May’s Nationwide House Prices also failed to meet with the market consensus, with the yearly figure at 4.6% and the monthly at 0.3%. The Pound is generally holding steady versus most of its closest rivals, however, as traders await the Markit Composite and Services PMIs due for publication later on Wednesday.

Euro (EUR)
With time quickly running out before Greece has to make an International Monetary Fund (IMF) repayment, the Euro is feeling the pressure. Creditors have submitted a take-it-or-leave-it reform package to Athens. Greek government officials have submitted a proposal of their own so it is now a waiting game to see whether either reform package will be agreed upon. The European Central Bank (ECB) makes its interest rate decision later today. However, the central bank is very unlikely to make any significant changes to policy so trader focus will be firmly on Greece. With that being said, the accompanying press conference from President Mario Draghi may cause Euro volatility.

US Dollar (USD)
After the US printed poor data on Tuesday, with Factory Orders dropping by -0.4% in April, the US Dollar softened versus nearly all of its major peers. The depreciation was exacerbated by Federal Reserve official Lael Brainard who stated that policy liftoff was still some way off. The US Dollar is unlikely to make any significant gains ahead of the ISM Non-Manufacturing Composite which is due for publication later on Wednesday afternoon.

Australian Dollar (AUD)
The Reserve Bank of Australia (RBA) avoided cutting the benchmark interest rate on Tuesday, despite frequent complaints about ‘Aussie’ AUD) overvaluation, which caused the Oceanic currency to advance across the board. The softer US Dollar also fuelled the appreciation. Wednesday has seen the ‘Aussie’ continue to gain versus its rivals after growth data bettered median market forecast figures. A slightly weaker Performance of Service Index was overshadowed by the Gross Domestic Product results.

New Zealand Dollar (NZD)
In response to a softer US Dollar, the ‘Kiwi’ (NZD) climbed against many of its competitors on Tuesday. The South Pacific currency has since lost ground, however, as falling dairy prices weigh on demand for the commodity-correlated asset.

Canadian Dollar (CAD)
Although there was a complete absence of Canadian economic data on Tuesday, the ‘Loonie’ (CAD) advanced versus its rivals thanks to rising crude prices. Easing tensions regarding Greece also saw support for the risk-correlated currency. The Canadian Dollar’s gains were somewhat short-lived, however, with renewed fears surrounding Greece and oil prices edging lower once more.

As of Wednesday, 3rd June 2015, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.3609, GBP USD exchange rate was 1.5328, GBP AUD exchange rate was 1.9719, GBP NZD exchange rate was 2.1437, and GBP CAD exchange rate was 1.9093.

Latest Currency News Items:

• Euro Surges as Highly-Mutated Coronavirus Variant Rattles Global Markets
• Delay to Lockdown Easing Triggers Slump in Pound (GBP)
• New Zealand Dollar (NZD) Surges as RBNZ Hints at Raising Interest Rates in 2022
• Pound (GBP) Exchange Rate Dips Despite the UK's Inflation Doubling in April
• Pound (GBP) Rises as UK Growth Rebounds in March