stockmarket-mobile

The pound continues to plateau

8th August 2017 Market Update

Get a snapshot of the day’s most important market events and currency movements sent straight to your inbox every morning. Sign up to our Daily Market Report.

🇬🇧 GBP – This is a quiet week for the UK, with no significant data out until Thursday, when PMI figures will be released along with the GDP estimate. The pound has been on the back foot following the MPC’s interest rate decision last week and Mark Carney’s dismal outlook for the future of the economy.

Yesterday saw the pound reach its weakest against the euro since October 2016. Although official inflation figures will not be out until later this month, unofficial data released by Visa yesterday buttressed Carney’s outlook. Figures show that UK consumer spending fell in July for the third consecutive month, the longest contraction in more than four years, according to an analysis of Visa card payment records. A decline in household consumption, which accounts for more than 60 per cent of the economy, would exacerbate the fragility of the UK’s economic outlook.

🇪🇺 EUR – The euro has continued to gain strength against both the pound and the dollar, with factors such as strong economic data and lower than expected inflation in the United States as driving factors.

German trade and current account surplus grew in June, as falling imports helped bulk up figures. Brexit negotiations will continue to impact the Eurozone, as Teresa May continues to clash with Gunther Oettinger, Commissioner for Budget and Human Resources, who claims that the UK cannot stop payments to the EU until at least 2020. Developments here will likely reflect in the rate.

🇺🇸 USD – Consumer borrowing slowed in June from growth in the previous month, but continued at a solid pace according to fresh government data released by the Federal Reserve. At 3pm, the Bureau of Labour Statistics will release the number of job openings reported during the month. This is unlikely to cause any movement, unless the figures reveal an unexpected shift in either direction.

Other news – There is a New Zealand interest rate decision on Wednesday, followed by the policy statement.

 

Key Announcements

No significant data due today.

 

Our View: With no major data out today, we can expect the pound to continue trading flat. Theresa May is due to publish Brexit position papers on the UK’s demands, starting with details of a proposed transition period, when she gets back from holiday next week. It will be interesting to see what effect this will have on the pound.

 

Find out more about our FX Dealing Service for personal & business international payments. We’re committed to giving all clients the best rate possible, along with flexible and personalised service. Save time and money by reducing risk through a simple and efficient service.

FairFX Dealing Service

 

Share:
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.

Leave a Reply