Despite stronger-than-expected UK construction sector growth in September, the pound is tumbling to its lowest levels since 1985 as investors anticipate the “hard Brexit” event set to begin in March 2017. This afternoon will bring price data from the UK’s top retailers for September, which could help pare the pound’s losses if there are positive surprises.
The negative pound sentiment is giving the US dollar a boost this morning as investors flee toward potentially safer assets. The greenback is also getting support from this morning’s Redbook index report, which showed 1.3% same-store sales growth among retailers (as analysts expected).
The euro is falling against the US dollar as producer prices out of the Eurozone contracted more than 2% year-over-year in August. Tomorrow’s string of non-manufacturing business activity reports out of Italy, France, Germany, and the broader Eurozone will give us more insight on how the region is faring more than three months since the Brexit vote.
The Australian dollar is also down against a stronger US dollar as investors await tonight’s retail sales data from August. The Reserve Bank of Australia kept rates unchanged at last night’s meeting, as economists had anticipated. The Canadian dollar is declining compared to the greenback too, despite an uptick in oil prices.
EURUSD: The euro is down against a stronger greenback and as Eurozone producer prices contracted in August.
GBPUSD: The pound is falling to its lowest levels since 1985 as the Brexit event becomes more of a reality.
AUDUSD: The Aussie dollar is down against a rising US dollar as investors await tonight’s retail sales data.
USDCAD: The Canadian dollar is lower against a stronger US counterpart despite oil prices continuing to rally.