Major currencies steady ahead of key central bank meetings
Currency markets were relatively quiet on Monday, with the major currencies mostly range bound ahead of a busy couple of weeks of central bank monetary policy meetings. First up will be this Thursday’s European Central Bank meeting. As we mentioned last week, we think that this meeting will be one of the less important meetings of the ECB in a number of months, given the major announcement on the bank’s QE programme is now behind us. The market may instead focus on any commen
The week ahead: Sterling Sinks over mixed Brexit data.
Sterling was the worst performing G10 currency last week. Relatively solid labour data was not enough to offset disappointing inflation figures, and news that Prime Minister May is finding it increasingly difficult to put forth any coherent plan at all, as first the hard Brexit faction and then the pro-EU side of her own party staged loud revolts. It was interesting that the latest volley of rhetoric outbursts from Trump, this time about interest rates and the Dollar, impacte
Sterling tumbles to September lows after retail sales miss
The Pound continued to languish around the 1.30 level against the US Dollar yesterday, with investors dialling back bets on a Bank of England interest rate hike following Wednesday's soft inflation print. Ahead of next month's MPC meeting, markets are now placing around a 70% of a rate hike after inflation held steady at 2.4% for June, in contrast to the 80% probability earlier in the week. Sterling was already firmly on the back foot before the release, with investors becomi
Sterling sinks to ten month low on Brexit debate, soft inflation
The Pound slumped to its lowest level against the US Dollar since September this morning, as investors grew increasingly concerned that Theresa May would not be able to force through her Brexit plans. May’s authority was questioned again during yesterday’s parliamentary debate. While the PM was able to win a key vote over her custom union plans on Tuesday, the debate again highlighted the growing divisions within her own party over Brexit. Governor of the Bank of England, Mar
Traders dump Sterling after Trump threatens US-UK trade deal
The Pound slumped to its lowest level, in the last ten days, against the US Dollar this morning after Donald Trump said that the UK would ‘probably not’ get a trade deal with the US should Theresa May follow through with her Brexit plan. This is another major blow to the Prime Minister, who already saw two of her key cabinet members resign in protest of her Brexit plan.
Thursday’s release of the UK government’s Brexit blueprint provided a small, temporary bounce for the Po
Dollar stabilises, Euro gains
The common currency jumped before the opening bell of the London trading, pushing the EUR/USD above 1.17, the highest level in over a week. The Euro was supported by the strong industrial production data from the Eurozone’s biggest economy and a Bloomberg report mentioning that some ECB members believe that postponing the first hike in the Euro Area until late-2019 could prove to be too late. A confirmation to the European carmakers from US ambassador in Germany that Trump wo