bank of england

Carney rallies the pound

6th July 2018 Market Update

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?? GBP – The pound rose to a seven-day high on Thursday after Bank of England Governor Mark Carney said he was confident an economic slowdown was temporary. However, the rally was short-lived ahead of a key government meeting on Brexit. The Prime Minister will today propose a new plan to ease trade and offer Britain more freedom to set import tariffs. With less than nine months until Britain exits the bloc and no trade agreement secured, there is concern that the meeting risks undermining the stability of May’s government. Despite some encouraging economic news, this concern continues to weigh heavily on Sterling.

There is no economic data due today.

?? EUR – There is little to report with the single currency, as it continues to hold steady versus the pound and US dollar amid a lack of economic fundamentals. The euro has remained bound in a tight range for quite some time.

?? USD – The dollar remained unchanged versus its peers on Thursday, as investor caution prevailed with US tariffs on Chinese goods taking effect and market investors turning their attention to the closely-watched US jobs report due later today. There is some risk to the greenback as focus shifts to any retaliatory trade measures that China could employ, but so far reaction has been limited.

Yesterday’s FOMC meeting minutes had little effect on the currency.


Key Announcements

?? USD
13:30pm: US Non-Farm Payrolls and Unemployment Rate


Summary: Sterling rallies after Carney speaks, but imminent Brexit meeting pulls the pound back by close of business.


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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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