GfK Consumer Confidence Survey Fails to Dent Pound's (GBP) Appeal

July 8, 2016 - Written by James Fuller

STORY LINK GfK Consumer Confidence Survey Fails to Dent Pound's (GBP) Appeal

Sterling has remained a safe option lately, due to an unusual relief rally being effectively sustained over the course of the day.

UK Consumer Confidence saw Sharpest Drop in 21 Years

The latest UK Consumer Confidence survey from leading market research firm GfK, published earlier today, suggests that UK economic participants have altered their behaviour during the immediate aftermath of last month’s UK referendum result. The reading for the previous GfK survey revealed that, on balance, UK consumers were mildly pessimistic, printing at -1; the latest edition of the closely-monitored survey painted a different picture, printing at -9.

Joe Staton of GfK scrutinised the results, noting that, ‘our analysis suggests that in the immediate aftermath of the referendum, sectors like travel, fashion and lifestyle, home, living, DIY and grocery are particularly vulnerable to consumers cutting back their discretionary spending.’

The Pound Sterling euro exchange rate sank to an intraday low of 1.1652 GBP EUR in the aftermath of the release. There could be further losses to come for the pair of this afternoon’s US jobs numbers disappoint, as they did last month.

Such an outcome would see the US Dollar (currency : USD) weaken and the euro (currency : EUR) would record sustained gains against the Buck in the currency markets as a consequence; via arbitrage funding in the markets, this move would also see the shared currency gain ground against the Pound.

A trading rate of below the 1.1500 GBP EUR threshold would appear a live possibility for the pair in such a circumstance.

Canadian Labour Mmarket Data to Provoke GBP CAD Volatility

The other data highlight for today comes in the form of June’s Canadian jobs data. A slight rise in the overall level of Canadian joblessness is anticipated from May’s showing of 6.9%.

If the official figures defy these expectations and reveal that Canadian unemployment was maintained at the same level last month, then the Canadian Dollar (currency : CAD) could record fresh gains against the UK unit.

The GBP CAD exchange rate has settled in the 1.6000s and a decent showing from this afternoon’s jobs statistics could send the pair down towards the 1.5000 GBP CAD level.

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