Today’s rate 1.1559
Keep an eye on the currency markets with up to date information on currency exchange rates. Here we provide a brief summary of the latest GBP/EUR exchange rate news and highlights.
Morning Report 23.03.2017
Sterling in Focus Ahead of Retail Sales
Alexandra Russell-Oliver, FX Analyst & Moneycorp Dealer Team
- Yesterday’s Market Highlights
Risk off sentiment continued yesterday ahead of Trump’s healthcare bill vote on Thursday. Sterling briefly fell on the terror attack at Parliament.
GBP/USD retested 1.2500 in overnight trading, some of its highest levels this month. GBP/EUR inched towards 1.1580, nearly three-week highs. EUR/USD traded either side of 1.0800 but held shy of February highs around 1.0830.
The Reserve Bank of New Zealand kept interest rates on hold at 1.75% as expected, stating that monetary policy will remain accommodative “for a considerable period”. The Bank cited “numerous uncertainties”, particularly regarding the global outlook. The kiwi dollar weakened further against the pound, breaking back above 1.7740.
GBP/EUR: Currently trading at 1.1559
- Today’s Market Highlights – Looking Ahead
Sterling is back in focus this morning with the release of February Retail Sales (09:30 GMT). Sales are expected to have picked up on both a monthly and annual basis, which could strengthen the pound.
Fed Chair Yellen delivers the opening remarks at a conference this afternoon (12:30 GMT) and her comments will be watched for any forward guidance.
US economic releases include Initial Jobless Claims and New Home Sales (12:30, 14:00 GMT). Trump’s healthcare bill will be in focus as significant opposition may increase concerns that tax reforms could subsequently be delayed.
Overnight, New Zealand releases trade data.
- Today’s Market Highlights – Looking Ahead
Something will turn up
There was little sign of any competition between the premier league currencies on Wednesday. The Canadian dollar strengthened by half a cent against sterling and the euro was a quarter of a cent lower. Only the South African rand really went anywhere: it was up by 1.3%, 20 cents.
Sterling lost seven ticks to the Swiss franc and 11 to the NZ dollar. Both equated to a -0.1% loss. The pound also declined by an average of -0.1% against the other dozen most actively-traded currencies. Had it not been for by the rampant rand that average change would have been zero. Wednesday really was that quiet.
As usual, it is harder to explain why nothing much happened than it is to interpret a big move. The sensation was that after Tuesday’s burst of activity investors were sitting back to reassess the outlook and they were struggling to find inspiration. One hoped-for source of that inspiration was the progress of Donald Trump’s health care bill through Congress. An easy passage would bode well for the as-yet-unspecified stimulus measures that investors are still hoping for. Rejection of the bill would cast doubt on the president’s ability to shape legislation.
It was always going to be difficult to find anything useful among Wednesday’s economic statistics. Sure enough, there was little there for investors to get their teeth into. The Reserve Bank of New Zealand’s unchanged Official Cash Rate was as anticlimactic as it had been expected to be.
The lack of ecostats from the major economies led to more attention being paid to the data from South Africa, which were not bad. CPI inflation slowed from 6.6% to 6.3% while core inflation, excluding food and energy, was down to 5.2%. The current account deficit shrank to 1.7% of gross domestic product in Q4 and the balance of trade moved into surplus.
The pace of US existing (second hand) home sales slowed by -3.7% in February and oil stocks were up by nearly 5m barrels in the week to 17 March. Ho hum.
On a global scale the two big events today are a speech by Federal Reserve chairperson Janet Yellen and, much later, the House of Representatives’ vote on Mr Trump’s health care bill. From a domestic perspective the focus will be on the UK retail sales figures for February.
Analysts expect retail sales to have risen by a monthly 0.4%, counteracting January’s -0.3% decline. That would equate to an annual increase of 2.6%, although the CBI’s Distributive Trades Survey, which comes out an hour and a half later, could well show a higher figure.
Ms Yellen will not be the only Fed boss speaking today: perma-dove Neel Kashkari will be spreading his no-hurry message this evening and, later on, Dallas’s hawkish Robert Kaplan will doubtless be talking of further increases. Tonight New Zealand reports on February’s balance of trade and tomorrow brings the ever-exciting US durable goods orders figure.
Your Market update for the week-ending 17-03-2017
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It was almost a single-issue week for the euro, that issue being the possibility that Geert Wilders’ anti-everything nationalist party could do well in Wednesday’s Dutch general election. Were he to do so it would, supposedly, pave the way for an even bigger anti-EU upset in next month’s French presidential election. It didn’t, and the status quo was preserved. The euro enjoyed a relief rally as soon as the exit polls were revealed.
Sterling had a topsy-turvy week swinging back and forth across a one-and-a-half-cent range, often for no clear reason. It was hurt by weak UK production data and by a further slowdown in the pace of wage increases and helped by one of the Monetary Policy Committee members unexpectedly voting to increase the Bank Rate. The net result was a euro that was unchanged on the week against sterling. It added a cent and three quarters against the US dollar.