GBPUSD touches pre-Brexit-vote high

The UK and US both had public holidays on Monday. We hope you had a good long weekend. In fact, the weekend was historic in more than one way. Not only did the UK get a very sunny bank holiday weekend but the rollout of the vaccine program in Britain has put the UK ahead of other nations when it comes to recovery forecasts. So the Sterling – US Dollar exchange rate hit a high of $1.4240; a level not seen since the Brexit vote in June 2016.

The US Dollar is also weaker ahead of this Friday’s US employment data.

Whilst the UK and US rested, the rest of the world carried on regardless and there has been a satchel full of interesting news in the last 24 hours.

GBPAUD highest in 6 months on RBA hint

The Reserve Bank of Australia left the Australian base rate on hold, as expected, but they did hint at expanding their bond purchasing activity in July. That kind of monetary expansion was bound to weaken the Aussie Dollar and we saw GBPAUD rise to the highest level in 6 months. It has paused though after a better-than-expected Australian manufacturing PMI and very lacklustre Aussie business profits data. Just to muddy the waters a bit, Aussie building approvals, although negative, were better than forecast. AUD buyers are likely to take advantage of these highs, so a decline in the GBPAUD rate is likely.

The data from Japan and China were mixed, so that didn’t trouble the scorers really, but the GBPJPY rate remains elevated in the high JPY 155 area.

Sterling has been supported this morning by a solid rise in house prices, as reported by Nationwide and we are expecting a healthy purchasing managers index (PMI) for the manufacturing sector. There are a lot of PMIs around this week, so that should keep the markets busy.

Q1 GDP to drive CAD

The Canadian Dollar will be in play today when Canada’s economic growth data is published. A healthy reading is expected in the Q1 GDP data. If the forecasts are correct, a 6.7% rise won’t be as strong as the Q4 figure but would still be a positive outcome. The GBPCAD rate is still trapped below $1.72. A break above that looks unlikely if this data is as forecast but, anything below 6.5% in Q1 would weaken the CAD. The weakness of the USD is also weighing on the CAD because the US is Canada’s major export market.

The Kiwi Dollar will be active overnight tonight. The release of the global dairy price index will have an impact, as will NZ import and export data. GBPNZD has still only partially recovered from the dramatic dip at the start of last week. It starts Tuesday around 1.9550.

And June 1st is international ‘Say Something Nice Day’. By the way, you look great this morning. Have you been working out?

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