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Sterling continues to fall, ahead of Bank of England’s Super Thursday

31st January 2017 Market Update

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🇬🇧 GBP – From the UK yesterday the pound traded in a one cent range against both the US dollar and the Eurozone’s single currency despite there being no major data out to report. The pound of late has struggled to trade through key levels seen in recent days given the amount of Brexit talk last week and political uncertainty coming from the United States.

🇪🇺 EUR – From the Eurozone on Monday the single currency edged lower versus the US dollar despite better than expected consumer confidence numbers. The euro of late has found itself in a narrow trading range against the U.S dollar despite a raft of political and economically data over the past few months. Data showed yesterday that inflation in Germany on the year gained to 2.0%.

🇺🇸 USD – From across the Atlantic yesterday relevant data was at a premium, with a deluge of personal spending and income data. The highlight was that US consumer spending rose to a 3 month high in December pointing to sustained domestic demand and likely to follow through to solid economic growth in 2017.

Away from the data, there was focus amongst investors to the noises coming from Donald Trump and his executive order to instigate a US travel ban and the potential geopolitical impact this could have on US trade relations.

 

Key Announcements

🇬🇧 GBP
9.30am: Mortgage Approvals (Dec) – Expected to rise to 69,000.

🇪🇺 EUR
10:00am Consumer Confidence.

10:00am GDP Q4 2016 Expected 0.5% from previous 0.3%.

10:00am Unemployment rate.

10:00am CPI yoy Jan – Expected 1.4% from previous 1.1%.

🇨🇦 CAD
1.30pm: GDP (Dec) – Expected to rise to 0.3%.

🇺🇸 USD
3.00pm: Consumer Confidence (Jan) – Expected to drop to 112.5.

🇳🇿 NZD
3.00pm: Consumer Confidence (Jan) – Expected to drop to 112.5.

 

Our View: Sterling has been on the back foot over the last three trading days following a good two week run. Investor attention is focused on Super Thursday with a cautious tone expected from the BoE governor which could well cause the pound to fall further by the end of the week.

 
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Darren Kilner

Darren Kilner

Darren is Head of Dealing at FairFX. Darren lives and breaths FX, his Mastermind topics are G8 currencies and economic forecasts.

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