The Pound exchange rate climbed versus the Euro (GBP/EUR) this morning as Bank of England (BoE) comments boosted the British currency. However, gains were short-lived and Sterling began to lose some of its shine as investors grew concerned on how the British economy was faring.
Pound Exchange Rate’s BoE Gains Reversed as UK Factory Orders Drop
While investors jumped on the Pound at the Bank’s optimism, they later sold-off the currency when it was revealed UK factory orders weakened in May to their poorest level since late 2016. The Confederation of British Industry (CBI) stated that lacklustre domestic demand had dented UK manufacturers.
Additionally, retail giant Marks and Spencers announced it would be closing 100 stores in a bid to make better profits and be in a firmer position to compete with online retailers. Marks and Spencer’s shares have fallen by around 3.0% today and if prices keep declining, it’s possible the company could drop out of the FTSE 100 when index changes take place next week.
Meanwhile, the Euro could be in for some exchange rate movement tomorrow when German and Eurozone Manufacturing, Services, and Composite Markit Purchasing Managers’ Indexes (PMI) are published. Eurozone Consumer Confidence will also be out later in the session.
Turkish Lira Exchange Rate Sinks as Emerging Markets Suffer
The Turkish Lira has been one of the worst performing currencies this week marking fresh record lows against the Buck with losses of around 2.0% against the US Dollar (TRY/USD) on Monday, and losses of 1.50% against the Pound (TRY/GBP) today.
As the Dollar strengthens, emerging market currencies have been less appealing to investors, and Turkey’s a particularly weak subject with political uncertainty, current account deficits, and dependencies on oil. Rabbobank analyst Piotr Matys commented:
‘It is truly staggering that Turkey’s central bank remains reluctant to take action despite the ongoing depreciation of the Lira, which will not only have serious negative implications for inflation, but it also increases the risk of hard landing.’
The Pound to Turkish Lira (GBP/TRY) exchange rate is trending at 6.2236. The Pound to Euro (GBP/EUR) exchange rate is trading at levels of 1.1406.