Sterling hosted its best week since 2009

18th January 2017 Market Update

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Highlights

?? GBP - More Sterling data today seen to support the upsurge from Theresa May's speech yesterday morning.

?? EUR - Euro markets grew weaker against the pound, off the back of the PM’s speech.

?? USD - No real news to be heard, as UK politics overshadow the dollar.
 

FairFX View: As a surprising turn of events, Theresa May’s comments reiterating her stance on a ‘Hard Brexit’ did send confidence back into the market, turning around her recent reputation for providing uncertainty to the pound. Ultimately, the markets liked the speech, due to the clarity it now provides, with regards to our position as a country and a currency.

 

Roundup

Sterling hosted its best week since 2009, as Brexit rallies went forward and actually rose for its sixth consecutive day, marking its longest run since March. The main factors behind the result were the high court ruling, PM’s further comments in Lancaster House and now the Bank of England do not look as certain to cut rates anymore.

Inflation actually grew from its previous figure in November but Mark Carney did warn of an inflation kick back from a weaker pound. He did say however, that policy makers will keep things on an even keel ‘whatever transpires’.

Theresa May's central comments were to remain bound to a ‘hard Brexit’ whilst taking a phased approach to implementing new rules, ensuring transition is smooth. Her spokeswomen said, regardless of how Parliament votes, ultimately “we will be leaving the EU”.

 

Key Events

?? GBP - Later this morning, the UK releases average earnings, which is set to improve on its last reading, contrasted by a more negative expectation from unemployment claims.

?? USD - This afternoon sees the US release their inflation readings set to slightly improve followed by Fed Chair Yellen commenting on Monetary Policy.

?? CAD - The Bank of Canada release their monetary policy report and rate statement - expected to leave rates unchanged.
 

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Read our latest articles, commentary and currency updates on the affect of Brexit in our Brexit Hub.

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