Cable Levels Drop Again, Vince Cable’s Party Making Gains
21th May 2019 Market Update
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?? GBP - Sterling started the week on the right foot yesterday by climbing off the 5-month lows seen at the end of last week. This was attributed to hopes that May’s “new, bold offer” will provide a way out of the current deadlock but the market remained very sceptical and the moves were accordingly minimal and short-lived. It is also possible that markets were taking profit before the uncertainty of the European Elections later in the week. Some of latest polls now show the Lib Dems moving ahead of Labour to move into second place.
This morning, sterling has continued to fall, particularly against the US Dollar. There is only the CBI Industrial Trends Survey in the economic calendar for the UK which will not shake the market. Political risks will continue to dominate ahead of inflation figures tomorrow.
?? EUR - The Euro had a quiet day yesterday on the data front resulting in a sideways trading day for the single currency.
It is likely to be another unremarkable day for the Euro today with only Consumer Confidence figures for May being released. These are expected to improve slightly but it is highly unlikely to cause the market to respond significantly.
?? USD - The Dollar did well to hold last week’s gains when the market opened yesterday morning and bodes well for the levels being maintained going forwards. The Fed’s Clarida and Powell spoke yesterday evening which did not cause any market reaction, but Fed Chair Powell did comment that it was too early to judge the impact that trade and tariff issues will have on monetary policy.
Today features some mid-level data in the form of Home Sales results for April but there is unlikely to be too much movement unless Evans and Rosengren provide previously unheard insight. It is more probable, however, that the market will wait for the release of the Fed minutes on Wednesday evening to find direction.
GBP: On the back foot again with a lack of data to support the pound
EUR: A quiet day ahead of EU elections later in the week
USD: Continues to benefit from its safe haven status
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