Pound sterling exchange rates endured a challenging week despite a raft of positive data. This week’s data saw the GBP weaken significantly against the Euro but enjoy a strong rally against the US Dollar.
The handful of releases which inflationary figures and retail sales all of which surpassed their monthly expectations.
CPI Economic Figures exceed expectations
Tuesday provided a raft of data much of which met or surpassed the targeted level. The CPI data which is considered the paramount source of inflationary data reached 2.7% vs the expected 2.6%. The figure up from 2.3% last month is higher than the Bank of England’s ideal level of 2% and has been triggered by a number of factors including; rising vehicle duties and electricity costs. Increased air fares prices as well as an upturn in the price of clothing.
The figure hitting its highest level since 2013 but slightly short of the Bank of England predicted high of 3%.
Retails Sales Surged in April
Yesterday’s retail figures also defied expectations reaching 2.3% v the anticipated level of 1.2% shrugging of last months ‘blip’ of -1.8%. Retail is a very valued barometer and yesterday’s levels demonstrated that UK consumers are confident despite Brexit.
GBP/USD Exchange Rate
Following the raft of encouraging Economic Data the GBP/USD exchange rate triumphed. UK markets opening on Monday a with a rate of 1.2887 and reaching a peak of 1.3043 before hitting resistance level. The US dollar regained some ground following better than expected jobs and manufacturing data. However, the week hasn’t been kind to the USD. Most of its pressure has been generated by comments and gaffs from Trump. Reacting to the criticism, Trump branded the speculation of impeachment and the negative press surrounding him as the
’single greatest witch hunt of a politician in American History’
GBP/EUR Exchange Rate
Unfortunately, the GBP/EUR did not enjoy the same ascension as the GBP/USD exchange rate and faltered throughout the week. With clearer political certainty in the Eurozone and the possibility of ECB Tapering over the coming months the GBP/ EUR weakened. Monday markets opened with a bid rate of 1.1816. The GBP/EUR exchange rate currently sits around 1.1663.
Although many had anticipated the Conservatives to win Junes upcoming election by a landslide polls are showing the size of their lead is potentially less than initially calculated.
With two polls showing that Labour may be slowly closing the gap on the Conservatives, one in particular indicating that Labour may have slashed the Tories lead by eight points.
Therefore, political uncertainty and continual BREXIT speculation and rhetoric will potentially burden pound sterling exchange rates in the coming weeks.
Upcoming GBP Economic Data Releases
With many the of the UK’s political parties having now released their manifestos and speculation of live debates being mentioned, further pressure could start to pile on the Pound sterling exchange rates.
In terms of Fundamental Economic Data the week ahead might not be the most taxing however all eyes will be without doubt on the GDP figure which is released on Thursday. Prior to this we will hear on the Bank of England thought on inflation.