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UK Pound Falls Against the US Dollar

By:
Peter Taberner

The GBP/USD rate has fallen in favour of the greenback, after yesterday’s second estimate GDP figures confirmed that growth had eased down to 0.4% in the

UK Pound falls against the US dollar

The GBP/USD rate has fallen in favour of the greenback, after yesterday’s second estimate GDP figures confirmed that growth had eased down to 0.4% in the first quarter of this year, from 0.6% the previous quarter.

The reduction in business investment in the UK, is also thought to have hurt the value of the pound.

Currently, sterling is buying $1.46 this morning GMT, a fall from over $1.47 yesterday morning.

Monex Europe in their daily round up said that GBP crosses, which does not involve forex trade with US dollars, are becoming more volatile.

While LMAX Exchange in their daily round up said that the Pound came back under pressure on Thursday, after stalling out ahead of major resistance at GBP/USD 1.4770.

The GDP data, plus weaker British Banking Association mortgage approvals, has weakened the pound.

Meanwhile, despite the latest surge in support for the remain camp, there is still risk, and bull traders may not want to get too far ahead of themselves until after the referendum.

Consumer Confidence Improves in France

Households’ confidence over their financial positions, has increased markedly on the National Institute for Statistics and Economic Studies  confidence index, rising by four points in May.

Despite the index remaining below the long term average 100 figure, consumers are positive about their finances over the next year.

In May, the share of households considering making major purchases has expanded significantly, by 7 points month on month, and has kept growing above its long-term average.

Consumers have indicated in the latest survey, that their current saving capacity is stable, although their expectations to save in the future has declined by a minus 2 points.

Standards of living in France are expected to improve strongly, as there was a nine point rise in the index on this issue.

Views of the past standard of living has also been raised by 10 points, pushing both of those surveys towards the long term average.

Consumers are also considerably more confident of holding onto their jobs, as fears of unemployment has been assuaged. The survey on this issue is now the lowest it has been since June 2008.

Unemployment has fallen for the second consecutive month in April by just under 20,000, a deep monthly decline in the figures, overall the rate of those without work is currently 10.2%.

Italian Retail Trade Index Falls

In March 2016, the Italian retail trade index decreased by 0.6%, in comparison to the results from  February’s index.

This was mainly attributed to a minus 1.2%  fall for food products, and minus 0.3% for non-food goods.

Year on year, there was more positive news for the sector, as it rose by 2.2% with the corresponding month in 2015.

The average of the first quarter of this year, was stable with respect to the previous three months last year.

The retail trade index measures the monthly turnover rates, at current prices of enterprises with retail sale outlets.

Throughout last year, the Italian economy has recovered itself, as growth rose compared to 2014, when the economy was in negative figures, in the first quarter of this year the economy rose by 0.3%.

Deflation has become an issue for Italy, as inflation has been in minus figures for the past three quarters, currently inflation is minus 0.5%, lower than the euro area’s deflation level of 0.2%.

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