The pound has been strengthening over the past week and that has continued this morning against the euro.
Against the US dollar the pound remains stronger than this time last week despite a gentle decline since Monday.
So far this morning we have heard that the German balance of trade has recovered to €7.7bn from last month’s huge loss, and there is a mass of data coming down the wires this morning including eurozone services PMI and retail sales.
In business news 16,000 small firms are reported to have gone bust after receiving covid loans from the government.
Tomorrow the Bank of England will be setting a new interest rate, so we can expect to see more volatility in the market over the next 48 hours.
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GBP: The pound finds new strength
The pound has strengthened against the euro this morning rising by nearly 0.2%. Sterling has also gained strength against the dollar and has risen by 0.3%.
Yesterday the UK released data on Nationwide Housing Prices YoY to July. the Index climbed 11.0% YoY a significant 10.7% more than June. Causing the pound to…
Data from the S&P Global/CIPS UK Services PMI Final will be released at 9:30am. PMI is expected to fall from 54.3 in June, but stay close to 53.
Good news for UK service sector this month as data shows services are slowly expanding – new order volumes in July were sustained even with consumers spending more on travel and leisure services.
However pressures increase for UK consumers as wage and cost of living burdens grow in the wake of nationwide staff shortages and inflation hikes.
GBP/USD over the past year
EUR: Euro weakens again
The euro weakened against sterling and the dollar yesterday.
Germany’s Balance of Trade report for June is released today showing somewhat stable import and export figures. Surplus in Germany narrowed to €0.5 billion as imports rose to 33.6% year-on-year to 129.8 billion amid surging energy prices, while exports rose to 130.3 billion
The market however is currently looking less optimistic in Germany as figures take a huge dive overall. The S&P Global Services PMI declined to 49.2 this month (from 52.4 in June) . Data shows this was also lower than market expectations which were at a slightly more optimistic 51.2.
Moreover, sales in Germany’s service sector also declined.
USD: Dollar recovers against euro
The dollar has now strengthened against the euro, returning to where it was last week. Against sterling, it has been a choppy start to the week with no clear diection.
Yesterday the figures for job openings in the US continued to rise, coming in well above market expectations of 11 million (and were still above pre-pandemic levels). These numbers suggest the demand for workers is still tremendously high.
Today we await the ISM Non- Manufacturing PMI for July which will be released later this afternoon. It is not entirely clear what the data may reveal as ISM Services PMI lowered to 55.3 in June from 55.9 in May, but the services sector still shows signs of growth, beating the market forecast.
Overall outlook still quite challenging as coronavirus pandemic and war in Ukraine continues to impact the service sector.
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