Pound under pressure as Aussie drops
Sterling remains under pressure this morning as interest rate decisions loom for the UK, US and eurozone. This week's figures have shown stronger manufacturing data across the regions, fuelled by stock building in the economy. Australian retail sales sunk overnight, sending the Australian currency lower.
Pound Sterling – UK Markets
Sterling currency rates are relatively unchanged this morning against the US dollar and euro, remaining under pressure after weak construction figures yesterday. The pound is currently valued in the region of 1.64 against the US dollar and 1.11 versus the euro.
The pound sunk lower on foreign exchange markets yesterday, as uncertainty over the Bank of England's decision and Gordon Brown's restructuring of the banking sector kept foreign exchange rates under pressure. Rebuilding of stock levels is contributing to a strong manufacturing sector at present as reflected across the UK, US and eurozone this week. This could affect the Bank of England decision this week and is likely to bring some volatility to the pound.
US Dollar – US Markets
The US dollar is tailing off this morning after a sharp rise overnight, currently trading higher at 0.67 against the euro and 0.60 against the pound. The greenback is also stronger against the Australian, New Zealand and Swiss currencies.
Foreign exchange markets received a boost yesterday after the ISM manufacturing survey, construction figures and pending home sales all came in ahead of market expectations. Factory orders however, were slightly lower than expected, rising 0.9% on the month while consumer confidence also dipped. US employment figures and the Fed interest rate decision will be a source of volatility for markets later in the week.
Euro – European Markets
Euro exchange rates remain firm this morning, rising against the pound, yen and US dollar after positive manufacturing results yesterday. The single currency is currently trading in the region of 1.47 and 0.89 against the US dollar and pound respectively.
Today in the eurozone brings the producer price index and PMI figures for the service sector, which are expected to have improved in the last month as the economy recovers. France's second largest bank Societe Generale has doubled third quarter profits on the back of its investment arm. The ECB is preparing an exit strategy from recent stimulus measures and more details on this will be revealed with the ECB rate decision on Thursday, which could bring volatility to the euro.
Other Currencies – Highlights
The Australian dollar fell this morning after retail sales came in weaker than expected, falling -0.2% after last months 0.7% rise. Building permits however have continued to rise, gaining 2.7% for the month of September. The Aussie currency is currently valued at 1.10 to the US dollar and 1.82 to the pound.
The yen is currently trading near a three-week high against the US dollar, following speculation that interest rates will remain low when the FOMC meets later this week. Bank of Japan's Governor Shirakawa has commented that the emerging recovery of other economies is helping to diminish the appeal of the safe haven US dollar and yen. Governor Shirakawa is due to speak today.