- Pound Sterling unchanged after UK inflation rate results – Concerns remain for future affordability
- Trident renewal goes ahead – Majority of MPs back costly deterrent
- Euro holds the line despite terrible domestic data – Confidence dives in Germany and the Eurozone
- Range of UK jobs data due tomorrow – Belgium consumer confidence due this afternoon
The Pound has been low across the board lately, having only managed to scrape gains in very limited quantities.
In an irregular development, the Euro has remained in fairly high demand overall, despite some astonishingly poor confidence printings for July.
UK Economic News: Pound Holds Losses as Worrying Inflation Rate Result Emerges
The Pound has been in low demand overall recently, which comes in sharp contrast to yesterday’s high-performance that was brought about by reassuring comments from Bank of England (BoE) official Martin Weale.
The latest data out of the UK has concerned inflation; while in more stable times a rise from 0.3% to 0.5% on the year in June might be considered a positive development, the fact that the UK is awash with economic uncertainty after the EU Referendum has meant that rising inflation has actually had a more harmful than helpful effect on the value of the Pound.
Responding to the news, Capital Economics UK Economist Ruth Miller said:
‘June’s rise should be the start of an upward trend in UK inflation in the wake of Sterling’s referendum-related slide. Give it a year, and above-target inflation should be back on the cards again’.
In other news, a majority of MPs in the House of Commons have voted to renew the Trident Nuclear Programme, which consists of defending the UK using nuclear weapon-loaded submarines at the cost of £31bn.
Among the Pound’s worst losses today have been declines of -0.5% against the Euro (GBP EUR) and -0.7% against the Chinese Yuan (GBP CNY). A rare gain of 0.6% against the Australian Dollar (GBP AUD) has been made.
Euro Steady against Peers despite Abysmal Confidence Printings
The value of the Euro has been high overall today, with gains being seen of 0.2% against the New Zealand Dollar (EUR NZD), 0.5% against the Pound Sterling (EUR GBP) and 1% against the Australian Dollar (EUR AUD).
These positive performances represent a continuation of earlier positive movements; the latest domestic data out of the Eurozone has been exceptionally poor, however.
In a clear sign of how the EU Referendum result has sent shockwaves out across the Eurozone, Germany’s ZEW economic sentiment index for July has fallen from 19.2 to -6.8, while for the Eurozone variant a decline from 20.2 to -14.7 has been seen.
In further negativity, the Germany ZEW current conditions result has fallen from 54.5 to 49.8.
Future GBP, EUR Forecast: Mixed Predictions for UK Unemployment, Claims and Earnings Stats
The near-future for the UK will bring the announcement of the nation’s claims, unemployment and earnings results for June in the former case and May in the latter two.
At the time of writing, forecasts were for a significant rise in the claimant count change, from -0.4k to 7.1k. For unemployment, no change is expected from the current 5%.
Average earnings including bonuses are expected to reprint at 2%, while the variant excluding bonuses has a dip from 2.3% to 2.2% expected.
From Europe, input will be had by Belgium’s pessimistically-predicted consumer confidence result for July this afternoon, as well as the Eurozone-wide consumer confidence flash for the same month tomorrow afternoon.
In a recurrent trend compared to today’s data, expectations are also poor for this second Eurozone confidence printing, which is understandable in a highly unstable post-‘Brexit’ market.
Current GBP, EUR Exchange Rates
The Pound Euro (GBP EUR) exchange rate was trending in the region of 1.1924 and the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.8387 today.
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