Sterling getting few votes from analysts

14th June 2019 Market Update

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🇬🇧 GBP –  Sterling fell as first round polling got underway in the Conservative leadership contest yesterday. Concerns about a disorderly Brexit persist for the market and this has been the reason for Sterling remaining rangebound around the current levels. The Pound did jump slightly on the news that Boris Johnson had convincingly won the first round. However, analysts cite the low chance of any news helping the Pound in the coming weeks and this has led to Sterling turnover dropping significantly since March and is 10% down on this time last year.

Today also features almost a complete lack of economic data for the UK and so the likelihood is that the market will remain subdued. Mark Carney, Governor of the Bank of England, is due to speak at 14:00 at the Women in Banking and Finance Awards which will be unlikely to provide any forward guidance.

🇪🇺 EUR – Eurozone Industrial Production figures remained in negative territory yesterday but did beat expectations on one measure. The Euro weakened slightly around this time but the figure in isolation is not one that is focused on. The ECB has joined Brussels in pushing the Euro as a global currency which it believes will give it more power to influence the economy through its monetary policy and less prone to spill over from the Fed. If it is successful, the Euro could be bought up and become stronger in the longer term.

Today sees the release of inflation figures from France and Italy which are expected to remain in line with the previous results. If this transpires, the Euro will start the morning quietly awaiting further news which may be provided by the ECB’s Lautenschläger​’s speech at 11:00.

🇺🇸 USD –  Only low tier data was published from across the Atlantic yesterday which maintained the tight ranges against the Pound but did push down the Euro/Dollar rate.
Today will see Retail Sales figures for May released at 13:30 which are expected to improve considerably. With concerns surrounding the US economy being tightened too much, a positive reading might push back the need for an interest rate cut in the coming months and should help the US Dollar accordingly.

 

Summary:

GBP: remains on the back foot
EUR: quiet end to the week for the single currency
USD: remains strong despite bets on an interest rate cut rising


 

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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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