24th January 2018 Market Update
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🇬🇧 GBP – Yesterday the pound continued to hit new highs against the US dollar since the Brexit referendum. This was due to dollar weakness more than sterling strength though, however the Brexit mood appears to have improved. Sterling was given a boost yesterday morning when public sector borrowing figures came in below expectations. This was a positive, as it shows the government is borrowing less than was expected and helped the pound maintain its strong position against the euro as well.
Today average earnings are expected to maintain its momentum and come in at 2.5%. Another strong reading could help Sterling keep up its momentum. The unemployment rate is meant to stay at 4.3%.
🇪🇺 EUR – Yesterday German ZEW economic sentiment came in above expectations, however this had minimal impact on the euro. This morning, manufacturing and services figures are being released from across Europe. The figures are both expected to be strong, however manufacturing PMI is expected to be slightly less than last time.
Tomorrow Europe will be the focus, with the upcoming interest rate decision, and analysts will be looking for any hawkish tones.
🇺🇸 USD – There was nothing of note from the US yesterday. The dollar remains under pressure despite further interest rate rises on the horizon. This morning the dollar has continued to weaken and there is very little data from the US today to help strengthen the dollar. The only thing of note from the US today is crude oil inventories, however they will probably have minimal market impact.
09:30am: Average Earnings Index
15:30pm: Crude Oil Inventories
21:45pm: CPI q/q
Summary: The dollar remained under pressure yesterday with the dollar index reaching its lowest levels since the end of 2014. Sterling maintained its momentum against the euro and dollar following good public sector borrowing figures. There also appears to be a change in the Brexit mood, and Sterling remains more resilient than had previously been forecast.
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