9th March 2017 Market Update
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?? GBP – Sterling traded at very similar levels yesterday as it did on Tuesday and as anticipated, there was little data capable of moving the market. This was highlighted by Sterling/euro opening and closing at pretty much the same rate in the UK trading session. Sterling/euro dropped off nearly half a percent late morning, an hour before the UK Budget announcement. The pairing then recovered in the hours that followed the budget, to reach a high of the day, in the early afternoon.
Mr Hammond said the following in the Budget report: “The economy will grow faster than expected this year, by 2%, that is faster than the 1.8% growth recorded in 2016 and substantially better than the 1.4% forecast for 2017 in the Autumn Statement.”
?? EUR – From the Eurozone, on Wednesday there was no significant data at all. The EUR traded at lower levels against dollar and Sterling again and dropped off 0.2% from the start to the end of play, against the dollar. As mentioned yesterday, we are likely to see a recurring theme with the euro trading at these lower levels, until the Dutch and French Elections have played out and people can start to trust the value of the single currency once more.
Today we have the ECB Interest Rate decision and ECB deposit rate decision at 12:45pm and the ECB Monetary policy statement at 13:30 which is all expected to be fairly conservative.
?? USD – From across the pond, the dollar followed the same trend as the euro, with very little telling economic data, which was reflected in the rate trading at very steady levels, throughout the whole session.
12:45 – ECB Interest Rate Decision. No change expected.
13:30 – ECB Monetary Policy Statement.
Our View: With the European Central Bank meeting today, it is likely that the pound will continue to struggle against both the euro and dollar. Most economic forecasts suggest the interest rate decision is expected to be fairly conservative. Over the last few months though, we have seen political data impacting the markets far more than economic data.
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