06/11/2017 – This Morning’s Exchange Rate

  • Posted by currencies in Rate Alerts
  • November 6, 2017
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Sterling rebounded modestly after its biggest one-day fall since the week after June 2016’s Brexit vote, with robust services data barely cushioning the blow from the Bank of England’s pushing-back of rate hike expectations on Thursday.

Despite the Bank raising rates for the first time in over a decade, it also told markets to expect only two further hikes in the next three years.

That sent the pound sliding by almost 1.7 percent on a trade-weighted basis – its poorest showing since June 27, 2016, in the aftermath of Britain’s shock vote to leave the European Union – as markets pushed back their bets on when the BoE would next hike rates to November 2018.

The dollar reversed losses on Friday after the release of U.S. factory orders and service sector data that saw investors look past a weaker than expected jobs report for October.

The dollar turned positive after U.S. factory orders and ISM non-manufacturing PMI data.
The Institute for Supply Management reported that its non-manufacturing purchasing managers’ index rose to its highest level since 2005.

Another report showed that new orders for U.S. made goods rose for the second straight month in September and orders for core capital goods rose more than expected.

The dollar had earlier fallen to its lows of the day after the release of October U.S. nonfarm payrolls, which came in below expectations.

The U.S. economy added 261,000 jobs in October, the Labor Department said, falling short of forecasts for 315,000 new jobs. The unemployment rate ticked down to 4.1%, its lowest level since December 2000.

Some key events this week which could move the markets:

Tuesday, November 7
The UK is to publish industry data on house price inflation.
European Central Bank President Mario Draghi is to speak at an event in Frankfurt.

Thursday, November 9
The U.S. is to release the weekly report on initial jobless claims.

Friday, November 10
The UK is to report on manufacturing output and the trade balance.

GBP/EUR 1.1283
GBP/USD 1.3092
GBP/AED 4.7115
GBP/AUD 1.7103
GBP/CAD 1.6706
GBP/CHF 1.3115
GBP/NZD 1.9013
EUR/USD 1.1592
GBP/ZAR 18.514

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