Pound Sterling Gains Continue as Part of Relief Rally

July 8, 2016 - Written by John Cameron

STORY LINK Pound Sterling Gains Continue as Part of Relief Rally

The Pound has made upward movements against most peers recently, thanks to an extended relief rally that began yesterday for the UK currency.

GBP EUR Exchange Rate Clawed Back Above 1.17 Yesterday

Yesterday’s morning session brought the publication of the latest edition of the closely-monitored Halifax House Price survey and the result provided the Pound Sterling (currency : GBP) with an unlikely fillip.

The consensus expectation amongst analysts was that the report would point to a significant slowdown to 7.8% in the pace of UK price rises. However, the headline rolling quarterly figure for June printed at 8.4% - down from May’s counterpart showing of 9.2%, but not by as much as the experts had been expecting. The Pound Sterling euro exchange rate clawed its way back above the 1.1700 GBP EUR threshold following the release; the pair had been languishing in the 1.1500s – a fresh multi-year low – during the middle part of the weekly session.

Martin Ellis of Halifax struck a mildly downbeat tone in the report accompanying the statistics, stating that,

‘There is evidence that the underlying pace of house growth may be easing. House prices in the three months to June were 1.2% higher than in the previous quarter; down from 1.5% in May. The annual rate of growth fell from 9.2% in May to 8.4%; the lowest since July 2015.’

He went on to suggest that this round of data was not enough to give any clear steer on the likely effect of last month’s unexpected Brexit vote from the UK electorate, stating that, ‘house prices continue to increase, albeit at a slower rate, but this precedes the EU referendum result, therefore it is far too early to determine any impact since.’

US Non-Farm Payrolls to Provoke US Dollar Volatility

Looking ahead, this afternoon’s all-important US Non-Farm Payrolls job creation data will determine the direction of travel for the world’s major currencies as we head towards the weekend market shutdown.

A relatively lowly result of 180,000 is expected; with last month’s counterpart result showing at a dire 38,000, a bounce back, which would strongly favour the US Dollar (currency : USD), is highly possible.

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TAGS: American Dollar Forecasts Euro Forecasts Pound Sterling Forecasts