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The Pound had yet another day of disappointing trading against the Euro and the US Dollar in the foreign exchange market yesterday. The GBP/EUR exchange rate which opened at 1.1420 fell sharply in early-morning trading, and ended the day lower at 1.1393. There was no significant data released from the UK yesterday, with movement in the market coming from other economic news from around the globe.
This morning has seen the release of July’s Industrial and Manufacturing production figures from the UK with the figures showing that industrial production fell both annually and monthly, from -0.3% to -0.7% and from 0.0% to -0.2% respectively, with manufacturing showing an unexpected pick-up from -0.4% to +0.1% monthly, but the annual level still falling from 2.1% to 1.9%.
The Euro did gain some ground against the Pound yesterday, but fell heavily against the US Dollar on the back of a downward revision in 2nd quarter GDP figures for the Euro-zone. With many market participants fearing the possibility of the Euro-zone falling back into recession; a downward amendment to the annual growth rate from 1.7% to 1.6% affected the currency heavily; with the EUR/USD exchange rate falling from 1.4110 at the market open to 1.3997 by the end of the day. There was also disappointment with the release of German factory orders which fell annually from 9.4% to 8.7% and month-on-month quite drastically from 1.8% to -2.8%.
Today will see the release of German industrial production figures, which do have the potential to move the market. Following on from yesterdays disappointing factory order numbers, it would be a blow to the Euro if industrial production were to show decline, as Germany is a nation renowned for its strong industry, and the sector is a huge contributor to overall GDP.
The US Dollar once again continued to press on in the currency exchange market, particularly against the Euro; gaining over a cent on the exchange rate throughout the day. There was also some positive data to back up the ‘flight to safety’ that is seeing funds flow into the Dollar helping it make such good gains; with August’s ISM non-manufacturing figure showing an increase, from 52.7 up to 53.3.
There will be some high-level market data released from the US today; with the release of the latest Federal Reserve Beige Book economic survey, which will give some key insight into economic conditions across the Federal Reserve’s twelve districts. The currency is likely to take direction from any change in the outlook of the report, and there may well be some comment passed form Fed officials on whether they feel that further quantitative easing is necessary to stimulate economic growth.
This Daily Market Update is brought to you by The Market Team @ KBRFX – Exchange Rates & Foreign Currency Transfer specialists.
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