11th October 2017 Market Update
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🇬🇧 GBP – Sterling rose on Tuesday after British industry data beat forecasts, adding weight to the argument that the Bank of England will raise rates at its next policy meeting in November. The Office for National Statistics said on Tuesday that manufacturing output rose by a monthly 0.4% in August, faster than the 0.2% forecast.
We have no major data out from the UK today, though with Sterling trading just over key support levels, any comments or press releases regarding Brexit could see those levels tested.
🇪🇺 EUR – The euro traded towards a one-week high on Tuesday after Germany’s trade data blew past expectations, boosting hopes the Eurozone economy’s outlook remained robust. The currency’s rise this year has lost some momentum in recent days as political concerns have grown – last night Catalan President Carles Puigdemont signed a declaration of independence from Spain.
The euro has been pushed down more than 3% against the dollar over the last month but underlying economic data has remained muted.
The only news for today has already come out with Spanish inflation falling to 1.8% – however there has been no impact on the euro following the data.
🇺🇸 USD – From across the Atlantic the only news of note was that Federal Open Market Committee (FOMC) member Neel Kashkari is being spoken about as a possible candidate for the top job as the head of the US central bank.
US FOMC minutes will be in focus this evening and markets will be looking for further rhetoric about if the Fed will indeed raise interest rates in December.
7.00pm – FOMC Minutes
Our View: The pound seems to be at a cross roads at present having traded towards its highest level against the US dollar last month, since last year’s Brexit vote. It remains to be seen what the outlook for Sterling will be over the coming weeks as continued Brexit talks and delays could send Sterling lower.
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