Pound Sterling (GBP)
Sterling got off to a poor start to the week, having been laid low by continued concerns about the UK’s economic future.
Last week’s Bank of England (BoE) interest rate cut is continuing to limit investor interest in the Pound, although other developments have also contributed to GBP’s lower rates.
One of these has been strike action across the Southern rail network, which is expected to continue for the entire working week and to result in hundreds of trains being delayed. Due to the location of the strike, key financial companies and major businesses in London are expected to be hit hard.
The first real UK domestic data is out tomorrow, consisting of June’s trade balance figures and comparatively positively forecast industrial and manufacturing production results for June.
As a new week of trading got underway the Euro advanced on both the Pound and US Dollar having been boosted by positive domestic data. .
In particular, the German industrial and Dutch manufacturing production results for June have both risen on the month, with the German printing beating forecasts. Also, Ireland posted a better-than-expected construction PMI for July.
The next big Eurozone announcement will come once again from Germany, with the nation releasing its negatively-forecast June balance of trade result tomorrow morning.
US Dollar (USD)
The performance of the US Dollar has been decidedly mixed lately, with positivity from the previous week’s change in non-farm payrolls result being counteracted by news of falling Chinese imports and exports in July.
Given how closely linked the Chinese economy and the odds of a Fed interest rate hike are, this result has done little to resolve tensions over whether or not a September interest rate hike will take place, as well as whether such a decision would even be appropriate at the present time.
The current week mainly features a broad spread of low-impact US data; the first piece will come this afternoon with the Fed labour market conditions index for July, which is expected to ‘improve’ from -1.9 to -1.5.
Australian Dollar (AUD)
The Australian Dollar has been steady against its peers lately, with Chinese demand for iron ore acting as a saving grace in otherwise unfavourable times.
Actual domestic data from Australia has been poor, with internet and newspaper job advertisements falling in July.
The next Australian data to watch out for will come early tomorrow, when the NAB business confidence stats for July come in. A reduction is forecast from 6 points to 5.
New Zealand Dollar (NZD)
The New Zealand Dollar has been in a state of decline against virtually all of its regular peers recently, having slipped due to concerns about Wednesday’s Reserve Bank of New Zealand interest rate decision.
As it stands, odds are for a rate cut from 2.25% to 2%, which would likely devalue the ‘Kiwi’ by a considerable amount in the near-term.
The rate decision will be the first actual data of the week for New Zealand, and is forecast to come on Wednesday night.
Canadian Dollar (CAD)
The Canadian Dollar has made tentative positive movements in exchange rates at the start of the week, with an uptick in the price of crude oil per barrel on the WTI index facilitating this.
The afternoon will bring the announcement of Canadian building permit results for June, which previously fell by -1.9% on the month.