19th June 2017 Market Update
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🇬🇧 GBP – The pound started off last week very much on the back foot after the election resulted in a hung parliament.
With little in the way of major data, Sterling remained muted until Super Thursday. Whilst nothing changed with interest rates on the day, the MPC returned only a 5-3 vote to keep rates on hold. With three committee members voting for an increase, investors took this as a sign that we may see a hike sooner rather than later, with inflationary pressures mounting. Consequently, the pound finished the week around 1% higher in value than the beginning.
With Brexit negotiations beginning today and political uncertainty ongoing, it remains to be seen if those gains can be sustained.
There is no data out in the UK today.
🇪🇺 EUR – The euro has largely been flying under the radar of late. It would seem that the hurricane rages around elsewhere, whilst the currency enjoys serenity in the eye of the storm. Inflationary data came out last week, coinciding with the news of yet another Greek bailout, but the single currency continued its position of strength, seemingly bulletproof. Let’s see what the UK negotiations bring.
There is no data out today in the Eurozone.
🇺🇸 USD – There seems little doubt that the greenback has been overvalued for quite some time. It is telling that, despite a Fed interest rate increase of 0.25% last week, the currency failed to make any headway. This may well be due to the uncertainty surrounding Donald Trump’s leadership and even he has admitted that he is under investigation.
There is a feeling that the dollar is positioned closer to the cliff edge than before. Any significant negative data, or political bombshells, could see the dollar lose considerable ground.
It is a very quiet day for data across the board and there is nothing out in the US.
No key announcements today.
Our View: Brexit negotiations will be taking centre stage at the start of the week. With a very quiet day economically and with little prospect of anything coming out of day 1 negotiations, it looks like Monday will be pretty flat.
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