As the local session opened on Monday the Pound was trading lower against rivals like the US Dollar and Euro.
The GBP/EUR pairing lost ground last week after the European Central Bank’s policy decision turned the Euro bullish. Meanwhile, GBP/USD declines were triggered by the publication of an unexpectedly positive US non-farm payrolls report.
Sterling largely retained these declines over the weekend.
The Pound was little changed after the Lloyds employment confidence gauge came in at -2 in February, unchanged from January.
Separate data published by the Federation of Small Businesses showed that confidence among smaller companies is on the up, with one FSB representative commenting; ‘Once again we see confidence on the up, and small firms leading the way in job creation. There is no doubt small businesses are pushing us further towards economic prosperity and it’s so important to retain this momentum […] With more businesses planning to invest, this can only be good news for the economy and the Chancellor needs to build on this in the Budget.’
The currency was feeling the pressure however as the reliability of the Bank of England was scrutinised in the wake of the suspension of an employee connected to the rigging of foreign exchange rates.
An unnamed BoE employee has been suspended pending investigation. At the current time no disciplinary action has been taken.
BoE Governor Mark Carney is due to testify to lawmakers tomorrow and answer questions concerning the foreign-exchange inquiry.
It seems likely that he may also find himself defending the integrity of the central bank.
According to lawyer Simon Hart; ‘The statement on the internal review is only an early staging post in what is likely to develop into a very significant issue. The statement left open as many questions as it answered. It was noticeably silent on what the Bank knew about other FX market participants.’
Over the next few days other factors with the potential to impact the Pound’s exchange rate include Ukraine developments, tomorrow’s UK British Retail Consortium like-for-like sales report, UK industrial/manufacturing production figures, the British NIESR GDP estimate for February, UK trade data and UK construction output numbers.
US and Eurozone data releases will also have an influence on how the Pound performs against its major peers this week.
If Eurozone data meets or exceeds expectations, justifying the ECB decision to leave stimulus unaltered, the GBP/EUR pairing may decline further over the next few days.
Similarly, if last week’s upbeat non-farm payrolls report is followed by encouraging US retail sales and confidence data the ‘Greenback’ could enjoy additional strength.
Pound (GBP) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.6652 ,
Pound Sterling,,Euro,1.2005,
Pound Sterling,,Australian Dollar,1.8442,
Pound Sterling,,New Zealand Dollar,1.9686 ,
US Dollar,,Pound Sterling,0.6003,
Euro,,Pound Sterling,0.8330,
Australian Dollar,,Pound Sterling,0.5423,
New Zealand Dollar,,Pound Sterling,0.5066,
[/table]
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