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Sterling Hits Multi Week Highs

1st May 2019 Market Update

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🇬🇧 GBP –  Sterling closed yesterday at multi week highs yesterday boosted by comments by Theresa May that talks between the government and Labour as “serious and constructive”. The PM and her government are planning one last meeting with Labour on either May 7th or 8th to finalise a cross party agreement for Brexit. Sterling finished the day at a two-week high versus the dollar and a three-week high versus the euro potentially bringing about a positive run for the pound.

In other associated Brexit news, Labour yesterday also agreed to support a second referendum but only as a last resort and Foreign Secretary Jeremy Hunt has warned grassroots Tories that challenging Theresa May as the PM now will only delay Brexit.

In focus today will be Markit manufacturing PMI’s forecasted to show slower expansion in the sector down from 55.1 to 53.1 UK housing data this morning came in better than expected with Nationwide reporting that house prices rose in April by 0.4%, up from 0.2% in March.

🇪🇺 EUR – The Euro drew strong support yesterday as growth in the first quarter accelerated by 0.4% – better than the expected figures of 0.3%. Amongst the highlights in the headline figure, Spains growth rose by 0.7%, France held at 0.3% and Italy exited recession with growth recorded at 0.2%. Alongside this Eurozone unemployment dropped to the lowest level in 10 years down to 7.7%.

With most of Europe closed for May day, there is no data out today.

🇺🇸 USD –  The US dollar lost ground across the board yesterday mainly down to end of month flows – investors coming out of the dollar following a strong month. On the data front, house price growth hit its lowest rate in seven.

Manufacturing PMIs are due for release from ISM and Markit forecasted to come in at 55 and 52.4 respectively. The ADP employment figures are also due today forecasted to show an increase in jobs of 180,000 for April. The Fed interest rate decision and monetary policy statement is out this evening also. No change in interest rates are forecasted but attention will be paid to Fed Chair Jeremy Powell comments after to see if any of Trumps criticism of the Fed will have an impact on the Fed rate cycle.

 

Summary:
GBP: Tory-Labour talks “serious and constructive”
EUR: Eurozone growth exceeds forecasts
USD: Dollar loses due to end of month flows


 

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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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