UK Economic Outlook Sours After Poor Industry Data

The pound slumped last week as data release after data release hammered the outlook for the UK economy during the second quarter. GBP/EUR closed the week at €1.1289, while GBP/USD entered the weekend trending at US$1.2873; a nine-day low in both instances.

There are some key data moments on the calendar this week, so expect big changes for the UK’s consumer spending outlook and the US monetary policy outlook.

Pound weaker after run of poor UK data

It wasn’t a great week for the UK economy. Data releases showed that the manufacturing, construction and service sectors had all seen a slowdown in growth during June. Then, industry data revealed that output was continuing to decline. Unsurprisingly, the pound didn’t react well.

Euro reactive to ECB policy hints

The euro had a mixed week last week, with data largely showing a healthy economy, but the odds of the European Central Bank (ECB) changing monetary policy any time soon remain weak. Overall, though, the common currency was on soft form.

US dollar boosted by US jobs data

Strong US data helped keep the US dollar on the uptrend last week, even if USD did fall quite spectacularly off the wagon at a couple of points. The latest monetary policy meeting minutes may have given markets some pause for thought, but USD quickly rebounded.

Australian dollar & New Zealand dollar respond to risk appetite

There was quite a bit for the Australian dollar and New Zealand dollar to be gloomy about last week. Even against the battered pound, the risky currencies Australian Dollar struggled. GBP/AUD may have lost its best levels for the week by Friday, but it still closed higher than opening levels at AU$1.6940. GBP/NZD didn’t fare well, however, ending the week at a low of NZ$1.7681.