30th July 2019 Market Update
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🇬🇧 GBP – Sterling suffered its biggest daily loss yesterday since March this year with the sole driver continuing to be the increased chance of no deal Brexit
Investors thoughts and fears and now turning to the prospect of an early general election. As Boris and his cabinet continue to push on the rhetoric that Britain should be prepared for a no deal scenario, the prospects of a no confidence vote in Parliament may well increase leading to the possibility of an early general election. An early general election could also bring in the prospect of a further extension to article 50 should it be before October 31st.
This week’s Bank of England rate decision and rate statement will do little to support the pound as the Bank looks unlikely to take any action as it prepares for a potential no deal.
Clients buying the pound from other currencies are now presented with an opportunity to buy the currency at its cheapest levels for almost 2 years. Please call the dealing desk to discuss options on how you can fix such a rate for any requirements up to 1 year.
🇪🇺 EUR – Only notable data was Spanish inflation figures coming in as expected at 0.5%
German inflation figures are due out forecasted to drop to 1.5% in July from 1.6% in June.
🇺🇸 USD – The dollar continued its monthly trend climbing to its highest levels since may 2019 with markets now having priced in a 25 bps rate cut already and now expecting a slightly hawkish rate statement which follows the rate decision, due to the recent better than expected growth figures for the second quarter of 2019. Of course anything less than this should bring dollar weakness.
Dollar data today is consumer spending inflation expected to rise to 1.7% – which could well add further USD strength.
GBP: Sterling suffers biggest drop since March
EUR: German inflation in focus
USD: Dollar continues its trend ahead of Fed decision
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