bank of england

Pound continues to struggle

9th March 2018 Market Update

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?? GBP – We had no data released at all from the UK which lead the pound to struggle to gain any real momentum. Donald Tusk spoke in regards to the Irish border claiming that the ‘UK must be clear and that any backsliding on commitments including the Irish border will only risk further disruptions within the Brexit talks and that they must be specific and have an explicit solution, otherwise it will be hard to see any progress.’ This lead to the pound losing a small amount of ground, however there was no significant movements.

Philip Hammond stated on Wednesday that a transition deal would be concluded this month and this lead to the other key reason for the pound to weaken off yesterday. Concerns were raised that the disagreement over the EU’s draft guidelines for a trade pact with Britain would prevent a transition deal being reached at a summit later this month.

Manufacturing and industrial production figures are both expected to improve today which could see the pound strengthen a little. This afternoon sees the first GDP estimate for February which is expected to fall slightly.

?? EUR – The EU has decided to drop its easing bias on its asset purchase and will be set at a new monthly pace of 30 billion and that the QE programme will run until the end of September. They stated they will keep buying until they are satisfied that consumer price growth is back on track towards the goal of under 2%.

The ECB decided as expected not to raise rates and to keep them unchanged. The governing council expects the key ECB interest rates to remain at their present levels for an extended period of time and well past the horizon of the net asset purchase.

No key releases from Europe today.

?? USD – The dollar gained some unexpected strength due to stating he would release his steel and aluminium tariffs.

Today we see the key non-farm pay roll figure which is expected to remain at the same level, at the same time unemployment rate is expected to improve. Average earning is expected to fall slightly but the other figures may be overlooked. The dollar looks set to have a decent end to the week.


Key Announcements

?? USD
13:30pm: Non-Farm payrolls, average weekly earnings and unemployment rates

?? GBP
09:30am: Manufacturing and industrial products expected at 0.2% and 1.5%
13:00pm: GDP first estimate expected to fall to 0.3% from 0.5%


Summary: Over the course of the day we saw small amounts of movement across the main three currency pairs. In respect to the main mover, the dollar gained strength across both of its main trading pairs.


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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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