Retail Sales Send Pound Sterling (GBP) Exchange Rate Lower with Euro (EUR) and New Zealand Dollar (NZD) Values Boosted
Pound Sterling (GBP) Exchange Rate Suffers from Disappointing Retail Sales
Following yesterday’s Bank of England (BoE) meeting minutes the Pound has continued to trend well against many of its rivals. With strong indications of an interest rate rise on the horizon, speculators have been forecasting that August’s vote will see a more hawkish stance from two or three officials. However today’s lower than expected figures for both year-on-year and month-on-month retail sales look set to put a dent in the currency’s bullish run. Further to this disappointing showing, the outlook of a BoE rise in rates may become more a distant prospect than previously projected. Since the report was published the Pound has recorded declines against peers such as the Euro (GBP/EUR) and Australian Dollar (GBP/AUD).
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Greek Reform Approval Gives Euro (EUR) Exchange Rate a Lift
Greek MPs voted overnight by an overwhelming majority of 230 to 63 in approval of the conditions set by creditors in order to secure the country’s latest bailout, giving the common currency a boost across the board. By further quelling fears of a ‘Grexit’, this move provides a strong rallying point for the still-struggling Euro, even though scepticism remains and the long shadow of the Hellenic nation’s financial collapse continues to plague its prospects. Gains against a softening Pound and US Dollar, among others, nevertheless offer a positive outlook for the time being.
Housing Data of No Assistance to US Dollar (USD)
The ‘Greenback’ has seen a slip in the hours following the release of data relating to the US MBA Mortgage Applications figure, House Price Index for May and Existing Home Sales for June. With the House Price Index hitting the predicted 0.4%, remaining in line with the previous month’s release, and Home Sales higher than forecast at 3.2% the currency has still seen a disappointing return. As many of its currency peers enjoy gains today, the EUR/USD and New Zealand Dollar (NZD/USD) exchange rates are trending at a hawkish levels.
Australian Dollar (AUD) Falls Further Against ‘Greenback’ (USD) Today
The ‘Aussie’ continues to suffer from a disappointingly slow rise in consumer prices and a declining commodity market. Current gains against the US Dollar are doing nothing to salvage the damage as the AUD/USD exchange rate trends at a multi-year low. Confidence remains low as further losses seem more likely than a rebound in the face of comments by Reserve Bank of Australia (RBA) Governor Glenn Stevens indicating that more rate cuts could be on the way.
Interest Rate Revitalisation for New Zealand Dollar (NZD) Exchange Rate
The Reserve Bank of New Zealand’s (RBNZ) decision to lower interest rates has pulled off a surprising resurgence in the value of the ‘Kiwi’. This seems likely due to a lighter cut than investors feared, with the OCR rate only going down by 0.25%. While this move has seen a number of pairings improving, in particular the New Zealand Dollar to US Dollar (NZD/USD) and Pound Sterling to New Zealand Dollar (NZD/GBP) exchange rates, this is merely helping the currency regain ground it had lost over the last few days rather than signalling a true revival of its fortunes.
Commodity Prices Continue to Leave ‘Loonie’ (CAD) Low
Hitting lows not matched since 2004 the Canadian Dollar struggles on in the wake of strong showings by many of its competitors. With the month-on-month retail sales for May due out later today, there may be a respite in sight for the ‘Loonie’, a strong showing could help bolster its value. In the wake of weaker than expected retail figures from the UK there has been a relative boost in the CAD/GBP rate, although CAD/USD remains trending low.