GBP/EUR: BoE Mark Carney Lifts Pound vs. Euro

The Pound to US Dollar (GBP/USD) exchange rate is treading water after paring gains in the previous session. The pair settled on Tuesday +0.1% at US$1.3383, over 100 points off the 8-month high of US$1.3492 reached earlier in the session. At 06:15 UTCM, GBP/USD trades flat sub US$1.34.

  • Pound (GBP) rattled by emergency Brexit talks
  • Footfall at British retail sites rose 6% in the week ending 29th August
  • USD rebounded off session lows after ISM manufacturing showed that the recovery in the sector continues
  • US ADP private payroll to show a solid 900,000 new hires in August vs 167,000 in July

The government have said that it will be difficult to reach a trade deal with the EU prior to the end of year deadline. Emergency talks between the two sides saw little progress once again, dragging on sentiment for Sterling.

The Pound had gained in the previous session following strong manufacturing PMI data and encouraging footfall figures. Footfall across all British retail destinations jumped 6% in the week ending 29th August. On an annual basis, footfall is still down -26.1%. However. this is the smallest decline since lockdown.

Given the UK economy is so dependent on consumers spending, this figure creates some optimism surrounding the economic recovery. Still it will be interesting to see what happens to footfall numbers now that Chancellor Rishi Sunak’s “Eat Out to Hel Out” scheme has ended.

Today investors will look towards a speech by Bank of England’s Governor Andrew Bailey as he appears before the Treasury Select Committee.

The US Dollar managed to pick itself up off session lows following better than forecast ISM manufacturing PMI. The report revealed that economic activity in the US manufacturing sector expanded at a stronger pace last month than in July. The ISM PMI jumped to 56, up from 54.2, hitting the highest level since January as the recovery in the sector continued.

This week is a big week for US data. Today investors will be looking towards US Beige book release, factory orders and the ADP private payroll numbers ahead of Friday’s non-farm payroll report.

Analysts are expecting 900,000 jobs to have been created in the private sector in August, following a rather a lacklustre 167,000 increase in July. The ADP is considered by economists a good lead indicator for the US labour department’s jobs report.