27th March 2017 Market Update
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?? GBP – Sterling was driven higher over the course of the week following some encouraging data.
Inflation climbed to 2.3% in February, overshooting expectations, and now at the highest level since September 2013.
Further support was found for the pound, when February’s Retail Sales came in higher than expected on Thursday, now at 3.7%.
Some of Sterling’s gain from across the week were erased on Friday, as markets appear to be tentative over scheduled triggering of Article 50 this Wednesday.
?? EUR – Euro demand increased at the start of the week following the first televised electoral debate in France. Markets deemed that centrist candidate Emmanuel Macron won the debate, erasing some fears of a potential ‘Frexit’ from the EU.
Further euro gains were seen on Friday, as Markit manufacturing and services overshot expectations.
?? USD – The US dollar remained on the backfoot throughout the majority of last week, as markets seem to be nervous of whether Trump can follow through with some of his fiscal policies.
Markets turned out to be correct, after Republican leaders on Friday, dropped legislation to replace the Affordable Care Act before a planned vote.
29/03/2017 – UK set to trigger Article 50.
31/03/2017 – Final Q4 GDP Figures.
31/03/2017 – March Inflation figures.
30/03/2017 – Final Q4 GDP figures.
Our View:The key event this week will of course be the triggering of Article 50. Whilst Sterling has had an encouraging two weeks, further gains could be muted ahead of PM Theresa May’s action to officially kick off the EU exiting process. Clients with any immediate requirements are encouraged to speak to their dealer to discuss potential fall out, as well as managing any future currency requirements.
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