The EUR/GBP edged up to 0.8380 as the pound weakened on lackluster growth data and the remain Brexit stress while the euro also weakened after the ECB did
The EUR/GBP edged up to 0.8380 as the pound weakened on lackluster growth data and the remain Brexit stress while the euro also weakened after the ECB did not surprise markets by keeping stimulus program unchaged. Sterling extended losses on today’s poor UK stats, with the British pound to euro conversion rate slipping further from best post-Brexit levels.
The British pound slumped from best conversion levels against the euro and the US dollar exchange rates (among other currency majors) today after the UK economy ‘contracted at steepest pace since 2009.
Although the UK’s political and economic landscape is tainted with high levels of uncertainty, GBP exchange rates have made significant gains of late.
It is worth mentioning that Sterling continues to hold a comparatively weak trade weighting, however.
Given that the European Central Bank’s asset purchase program will be less impactful with lower yielding bonds, this has weighed on demand for the single currency.
Euro losses have been somewhat limited, however, thanks to speculation that the ECB will hold rates tomorrow in order to fully assess the impact of Brexit.
However, ECB President Mario Draghi is also expected to deliver a dovish accompanying speech and leave the door open for more stimulus measures.
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Major Economic Events for the week:
Date | Currency | Name | Volatility | Previous | Consensus |
7/27/2016 | AUD | Consumer Price Index (YoY) | 3 | 1.3 | 1.1 |
7/27/2016 | USD | Durable Goods Orders | 3 | -2.2 | -1.1 |
7/27/2016 | USD | Fed’s Monetary Policy Statement | 3 | ||
7/27/2016 | USD | Fed Interest Rate Decision | 3 | 0.5 | |
7/28/2016 | JPY | BoJ Press Conference | 3 | ||
7/29/2016 | JPY | BoJ Interest Rate Decision | 3 | -0.1 | -0.2 |
7/29/2016 | JPY | BoJ Monetary Policy Statement | 3 | ||
7/29/2016 | EUR | Gross Domestic Product (YoY) | 3 | 1.7 | 1.6 |
7/29/2016 | EUR | Gross Domestic Product (QoQ) | 3 | 0.6 | 0.3 |
7/29/2016 | EUR | Consumer Price Index (YoY) | 3 | 0.1 | |
7/29/2016 | EUR | Consumer Price Index – Core | 3 | 0.9 |
Upcoming Government Bond Auctions
Date Time Country
Jul 25 11:30 Germany Eur 1.5bn Jul 2017 Bubill
Jul 25 17:20 Italy Announces details of bond auction
Jul 26 11:10 Italy Holds zero-coupon/BTPei auction
Jul 27 11:30 Germany Eur 1bn 2.5% Aug 2046 Bund
Jul 28 11:10 Italy Holds bond auction