House prices set to bore millions at dinner party conversations nationwide
Sterling attempted to push back against the Dollar yesterday and saw gains during the early session. GBPUSD climbed to 1.3090 but failed to breach 1.3100 and rebounded back to the 1.3000 level once the US got to their desks. The Pound struggled against the Euro again, however, with GBPEUR falling through the 1.1700 barrier.
Yesterday’s headlines were dominated by the Bank of England’s (BoE) admission that it failed to buy enough bonds on Tuesday; day two of the increased Asset Purchase Scheme designed to stimulate a post-brexit UK economy. Significantly, the purchases would be rescheduled until later in the year, presumably as it’s holiday time for many a decision maker. In the early hours of this morning UK Housing Prices data showed price growth fell to 5% in July from 16% in June; a 3-year low.
The US saw a very solid reading for the US job openings data, which reported a figure of 5.62mn for June from a revised 5.51mn in May. Hiring levels are up and there is a steady rate of job leavers, which continues to suggest a firm overall labour market. This pushed the US Dollar under 1.3000 versus the Pound but expectations of a Fed rate hike have remained unchanged.
Today will see more US employment data with weekly Unemployment Claims. This will be followed by Monthly Import Prices and mortgage data from the States. With no data due from the UK, this data may be the main driving force for GBPUSD today.
The Euro strengthened for the third day running against the Pound amidst fears surrounding the European banking sector, specifically Italy. The single currency recorded gains of 0.5% versus Sterling during yesterday’s European trading session and ended the day around the 1.1631 level as it continues to range between lows last seen in 2013.
Overnight, New Zealand joined the worldwide rate-cutting party. The Reserve Bank of New Zealand lowered interest rates to a record low of 2% to tackle low inflation and boost the NZ Dollar. At market open the Kiwi Dollar was only 0.75% cheaper against the Pound.
Data to Watch: EU German 10-year bond auction. 1.30pm US Initial Jobless Claims. US July Import and Export Price Indices.