The Pound to US Dollar (GBP/USD) exchange rate and Pound to Euro (EUR) exchange rate were little changed on Monday as investors continued to support the ‘Greenback’ and as Producer Price Inflation data aided the Euro.
Support for the US Dollar remained despite the release of data last week which showed that the number of new jobs created in the world’s largest economy came in below economist forecasts and as the USA’s unemployment rate increased unexpectedly in July.
Following the data the ‘Greenback’ weakened broadly, but by Monday it had recovered as investors continued to speculate that the Federal Reserve will raise interest rates next year.
The U.S. economy created 209,000 jobs last month, below economist expectations for a figure of 233,000.
Although it was the sixth successive month that the U.S. economy added more than 200,000 jobs, the unemployment rate unexpectedly ticked up to 6.2% from 6.1% in June.
Wage growth was also flat, pointing to underlying slack in the economy.
Early in Monday’s session the Euro came under pressure after a report compiled by Sentix showed that sentiment across the 18-member Eurozone slumped sharply in August as concerns over the imposition of Western sanctions against Russia weighed.
The sentiment index fell from a reading of 10 in July to 2.7.
The Euro dipped slightly following the release of the report. Losses were short-lived however as a separate report showed that producer price inflation in the single currency bloc increased for the first time in six months in June.
The data eased some concerns over the threat of deflation in the region and offered support to the Euro. Year-over-year, the producer price index declined at an annualized rate of 0.8% in June, below forecasts for a drop of 1%. Prices fell at a rate of 1% in May.
The Pound saw little in the way of movement after a report showed that activity in the UK’s construction sector slipped in July.
Despite the drop in activity the report also showed that the rate of house-building in the country increased at its fastest pace since November 2003 last month.
The monthly Markit/CIPS purchasing managers’ index (PMI) for the wider construction sector, which also includes commercial building and civil engineering, fell to 62.4 in July from 62.6 in June. Economists had been expecting a drop to 62.
Any figure above 50 indicates expansion, whilst one below indicates contraction.
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,1.6820 ,
Pound Sterling,,Euro,1.2527 ,
Pound Sterling,,Australian Dollar,1.8060 ,
Pound Sterling,,New Zealand Dollar,1.9793 ,
US Dollar,,Pound Sterling,0.5947 ,
Euro,, Pound Sterling ,0.7977 ,
Australian Dollar,, Pound Sterling ,0.5535 ,
New Zealand Dollar,, Pound Sterling,0.5051 ,
[/table]
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