statue of liberty

Washington woes weigh heavily on the US currency and stocks

18th May 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 – Figures yesterday showed unemployment has reached its lowest rate since 1975, falling from 4.7 to 4.6%. Despite more people being in employment, the claimant count change increased significantly more than expected, consequently causing GBP to weaken against the euro. Wage growth has also stalled in the UK, which signals there could be pressure on retail sales and consumer confidence looming. Against the dollar however we saw a different story, following fresh scandal from the White House. This leading to 7 month highs for the pound, which threatened to break the 1.30 mark.

🇪🇺 EUR – Data from the Eurozone all came out in line with expectations, resulting in a muted reaction in the markets. Inflation has stayed flat at 1.9%, which is just short of the ECB’s 2% target. The euro did enjoy gains as much as 1% against the dollar, as investors looked to shift their money into safer currencies

🇺🇸 USD – Allegations facing Trump were the main news yesterday. Trump is faced with claims that he withheld classified information from Russia during an investigation. This news emerges just days after Trump fired James Comey, his FBI director who was investigating Russia’s role in the US election. If claims hold true, it would be a compelling reason for some politicians to begin the impeachment process. The dollar index fell as low as 97.3 and the Dow Jones was down 1%, as investors flocked to other traditional safe haven currencies.

 

Key Announcements

🇬🇧 GBP
9.30am – Retail sales figures are expected to be higher than previous which would bolster GBP.

🇪🇺 EUR
12:30pm – ECB Monetary policy meeting accounts are being released which could indicate whether the ECB will look to taper off QE.
18:00 – Mario Dragi speech should bring together accounts information and political occurrences in the Eurozone.

 

Our View: We could continue to see volatility as markets continue to digest the political news from yesterday. A quieter day on the data front means that the announcements from the UK and Eurozone could have a bigger impact on rates.

 

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