GBP/USD Exchange Rate Slumps Following ECJ Ruling
This morning saw the news that the European Court of Justice (ECJ) has followed the advice of its Advocate General, Manuel Campos Sánchez-Bordona, stating that the UK is free to unilaterally revoke its notification of its intention to withdraw from the European Union without the permission of any other EU member states.
Further disappointing figures for Sterling came out this morning, as UK gross domestic product (GDP) for October showed very poor growth, even though it had increased in line with predictions to 0.1% from the previous month where the figure stood at 0%.
British manufacturing production fell further than expected to -1% from 0.5% on the previous October, and industrial production fell from 0% to -0.6% in October compared to the previous month, which has done little to help the Pound push back against the Dollar.
GBP/USD Exchange Rate Falls on Friday as UK House Prices Show Slowest Growth in Six Years
Friday saw the release of the Halifax house price index for November, which showed the value of British houses rose at their slowest pace in six years between September and November.
For context, before the 2016 Brexit vote, the house price index was rising by nearly 10% a year.
Halifax managing director Russell Galley stated:
‘While this is the lowest rate of growth in six years, it still remains within our forecast range of 0% to 3% for 2018.’
The average house price currently sits at £224,578, and it has been noted by Johnathan Samuels, Chief Executive of Octane Capital:
‘Without wanting to appear overly pessimistic, there’s every chance 2019 could be 2009 all over again.’
GBP/USD Exchange Rate Drops on Friday on Back of Steady US Figures
Friday saw the release of the US average hourly earnings for November, and the figure remained steady in comparison to the previous November.
The US non-farm payrolls, which show the amount of new jobs (in all non-agricultural business) created in November did not increase in line with the prediction, revealing 155K rather than 200K, from the previous 237K in October.
The unemployment rate for November also remained steady compared to the previous month, sitting at 3.7%.
The Michigan consumer sentiment index for December also remained steady at 97.5 despite the prediction that this figure would decrease, which saw USD rise against GBP.
GBP/USD Exchange Rate Outlook: Pound to Remain Volatile Ahead of Parliamentary Vote?
The UK’s parliamentary vote on Theresa May’s withdrawal agreement is likely to remain a large catalyst in the GBP/USD pairing’s exchange rate, with it likely that if the deal is rejected the Pound could drop substantially.
The US Dollar may see some movement tomorrow afternoon as the producer price index for November is predicted to drop from 0.6% from the previous month to 0%, and compared to the previous year a fall from 2.9% to 2.6%.
In terms of UK data UK, we are set to see the average earnings for October, which is forecast to remain steady at 3%, and the ILO unemployment rate for October, which is also predicted to remain steady at 4.1%.
If forecasts are correct, Sterling could rise against the Dollar tomorrow on this basis, although any data will almost certainly be overshadowed by the Commons Brexit vote.
Comments are closed.