GBP Steady despite housing data

It was inevitable that the persistent interest rate rises from the Bank of England would have an impact on the housing market. Nationwide released data this morning showing house prices in August down 5.3% on the year; the largest fall since July 2009. That is the 7th consecutive fall in this data set. Oddly though, sterling has gained some ground this morning after being sold off in the latter part of yesterday’s trading. It seems that was largely due to month-end adjustments in the markets. That said, the GBP/USD rate is back up to $1.2666 this morning and the GBP/EUR rate has recovered to €1.1674. We will say a purchasing managers index for the UK manufacturing sector at 9.30 am and the forecast is not attractive. So, sterling’s early morning gains will come under pressure if the forecasters have done their sums right.

USD has volatile night – employment data awaited

It has been the case in the past that the US employment data, which is normally released on the first Friday of the month, has been delayed if that first Friday falls on the first day of the month. However, it does seem that we will see The US data this afternoon and the markets are expecting a lower level of non-farm payroll gains this time round. That is unlikely to alter the 3.5% unemployment rate in the US but the US Federal Reserve will be watching the average earnings numbers for signs of wage price inflation. The US dollar had a good end to the month, gaining across the board as traders and investors settled up their open speculative positions. It has given up that ground this morning though. The GBP/USD rate shot down to $1.2640 overnight but is back up to $1.2680 at the time of writing. The EUR/USD rate followed suit; diving to $1.0830 before recovering to $1.0860.

CAD stays strong ahead of expected GDP slowdown

The GBP/CAD rate is down to the lower end of its recent ranges this morning ahead of Canada’s employment and economic growth data. At CAD 1.7110, this pair is in the upper third of the range it has occupied over the last month but there is a good chance it will rise again if Canada’s GDP growth is on par with or worse than the market forecast. In the year to March, Canada’s economy grew by 3.1% but it is highly likely that would have slowed to 1.2% in the year to June. Any improvement on that number will strengthen the Canadian dollar to some degree. Unlike the US, we won’t see Canada’s employment data today but I think the GDP data is enough to be going on with.