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A trio of unexpectedly upbeat UK economic reports for the services, manufacturing and construction sectors left the pound pretty upbeat as markets closed for the weekend and Sterling remains close to multi-month highs.
The GBP/EUR exchange rate begins this week at €1.1827 (up from this morning’s low of €1.1786), GBP/USD remains above $1.2950, GBP/AUD is trading at AU$1.7534 (up 5 cents from last week’s opening levels of AU$1.7070), GBP/NZD is holding NZ$1.8700 and GBP/CAD’s current rate of C$1.7735 is one of its highest since the UK voted to Brexit last year.
What impact did the French election have on GBP/EUR? Keep scrolling to find out.
What’s been happening?
The new French President has intimated he will be taking a tough stance on Brexit, and any further hints that he plans to make the UK’s exit from the EU difficult could send the pound lower.
Although the reports aren’t expected to alter the Bank of England’s (BoE) current attitude on interest rates, they are at least an encouraging sign of how the UK economy is performing.
The data was enough to give the pound a leg up against its peers and help it shake off concerns surrounding the fraught relationship between Prime Minister Theresa May and EU officials.
Meanwhile, over in France, Centrist Emmanuel Macron managed to crush far-right Marine Le Pen in the second round of the French election, taking 65% of the vote.
While this outcome has helped dispel Frexit fears, it was so long expected that its impact on the euro was pretty minimal. EUR exchange rates did enjoy a small rally immediately after the results were announced, but quickly fell back to previous levels.
The Australian dollar came under pressure this morning as domestic building approvals plummeted (exacerbating worries about the Australian housing bubble) and China’s trade data revealed a sharp slump in imports.
What’s coming up?
Today’s economic calendar isn’t exactly bursting with exciting releases, but there are a couple of reports to look out for.
The Eurozone’s Sentix Investor Confidence index for May is expected to climb from 23.9 to 25.2 – a potentially euro-positive result.
Canada is also set to release housing starts data, while the US rounds off the day with its measure of labour market conditions.
Macron’s victory may also be responsible for further movement in the currency market in the days and weeks ahead. The new French President has intimated he will be taking a tough stance on Brexit, and any further hints that he plans to make the UK’s exit from the EU difficult could send the pound lower.
