Concerns over the UK’s economic outlook persist
[vc_row][vc_column][vc_column_text]After two months of stagnation the UK gross domestic product picked up to just 0.1% in October, limiting the appeal of the pound as concerns over the economic outlook persist.
The Eurozone economy continued to show signs of weakening, meanwhile, as November’s raft of manufacturing and services PMIs pointed towards another month of easing growth.
As the US labour market showed signs of losing steam the mood towards the US dollar deteriorated on Friday, with investors seeing less chance of the Federal Reserve raising interest rates further in 2019.
With tensions between the US and China still elevated the appeal of the risk-sensitive Australian and New Zealand dollars also weakened, especially in the face of underwhelming Australian data.
[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]Modest uptick in UK growth fails to shore up pound amid Brexit uncertainty
Even though October’s monthly UK gross domestic product reading showed an improvement this failed to shore up the pound as Brexit-based uncertainty continued to weigh on the domestic economy.
With the UK economy looking on track to post another quarter of weak growth before the end of the year the mood towards the pound naturally soured.
As November’s services PMI fell into a state of near-contraction in November, sliding from 52.2 to just 50.4, investors saw little cause for confidence.
Worries over Brexit also helped to drag GBP exchange rates down, as expectations mounted for Theresa May’s proposal to see a significant defeat in Parliament.
Rumours of a delay to the landmark vote prompted further volatility for the pound on Monday morning, with markets struggling to maintain a positive outlook.
As long as a sense of political uncertainty continues to hang over the UK the potential for pound gains will remain limited, especially as the March 2019 deadline draws closer still.
Any softening in October’s UK weekly earnings data may also weigh down GBP exchange rates, with weaker wage growth likely to keep Bank of England (BoE) policymakers in a more dovish mood.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]
To request an instant quotation on a currency quotation please click here
* Information courtesy of Currencies Direct, Philip McHugh
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)
The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information. This article was written by Currencies Direct.
[/vc_column_text][/vc_column][/vc_row]
