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
FX markets eye key Federal Reserve, ECB announcements next week
The EUR/USD rate continued to edge higher on Thursday, although lost ground again this morning, with investors in a cautious mood ahead of a number of key announcements in the currency markets next week. First up will be the Federal Reserve meeting on Wednesday, with the FOMC expected to announce its second rate hike of the year, and seventh since the current tightening cycle began. We think that a hike at this month’s meeting is more-or-less a nailed on certainty. As is gene
Talk of end to ECB stimulus measures helps lift Euro to three week high
The Euro advanced to a three a week high against the US Dollar on Thursday morning, after European Central Bank member, Peter Praet, added weight to a report released this week that suggested policymakers in the Eurozone could soon be ready to announce an end date to its QE programme. Praet, one of the more senior members on the ECB’s Governing Council, said that the bank would next week debate whether to end bond purchases later this year. President of the Dutch central bank
Sterling recovers following impressive services activity data
Sterling initiated a fairly sharp rally against its major peers this morning after a solid services PMI reversed almost all of the currency’s losses from Monday trading. The UK currency had fallen across the board yesterday, as Brexit concerns clouded the outlook for the Sterling. Investors are sceptical that the UK government has proposals in place ahead of the EU summit later this month, while there was also pressure on Downing Street over the weekend to release papers outl
Soft UK inflation, retail sales data bring Bank of England rate hike into question
The Pound traded lower against the US Dollar for the second consecutive day on Wednesday, the first time it has done so since the end of March, after yesterday’s UK inflation data fell short of expectations. Headline inflation in the UK unexpectedly slowed to 2.5% in March, its lowest level in a year, after investors had eyed an unchanged reading of 2.7%. While in itself disappointing, its implications for the path of Bank of England interest rate hikes will be of much more c
Sterling edges higher, Euro slips on weak manufacturing data
Sterling firmed against its major peers on the first trading day since the Easter break on Tuesday as a better-than-expected manufacturing PMI drew attention away from the uncertainty surrounding the Brexit negotiations. The monthly manufacturing index, a survey representing business sentiment in the sector, came in at an above forecast 55.1 in March. This was comfortably above the 54.7 consensus that economists had pencilled in, although still marked its lowest level in a ye
Euro falls on disappointing Eurozone inflation news and month-end flows
These are often driven by the need of various asset holders to rebalance their portfolios. The rally in the Euro has left many asset managers underexposed to Dollar - denominated assets, hence the need for further buying. The Euro was not helped by the weak inflation numbers out of Germany, either. The most remarkable aspect of FX trading continues to be the lack of any visible impact among G10 currencies of the sharp sell-offs in risk assets we are witnessing worldwide. Even
Sterling sinks on month-end flows, easing trade tensions
The US Dollar rebounded from its lowest level in five weeks against its major peers on Tuesday, clawing back ground on a continued easing in trade concerns. End of month flows also dominated trading with this, as is traditional, which provided good support for the greenback. Sterling was particularly hard hit. The Pound fell off a cliff during morning trading, slipping by well over a percent in a little over five hours before retracing just under a half of its losses before t