Last Friday was mostly disappointing for the pound, as the currency fell following poor economic data. Specifically, year-on-year GDP growth came in at 1.5% despite expectations of 1.7%. The current account also missed expectations, with the trade deficit now larger than expected. Both are pound-negative, and the currency sold off on the news.
GBP/USD has now fallen below 1.34, with the exchange rate currently trading below 1.3360. We lowered our short-term outlook on the pound to bearish this morning following a few days of decreasing exchange rates. Looking at EUR/GBP, the euro has strengthened against the pound this morning, despite the drama of the independence referendum in Catalonia over the weekend. EUR/GBP is currently trading above 0.88. After rising for more of last week, the pound is flat against the Australian dollar and the Canadian dollar this morning. GBP/AUD is currently just below 1.71 while GBP/CAD is just below 1.67.
This week's economic releases includes a range of survey data. Later today, we'll see Markit manufacturing PMIs. Tomorrow we'll get Markit/CIPS construction PMI data while on Wednesday we'll get Markit/CIPS services PMI data.