30th August 2018 Market Update
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?? GBP – Sterling made its largest daily gain in seven months yesterday, following comments from Michel Barnier that appeared to concede that there will need to be an unprecedented third-party deal with the UK. This went some way to allaying fears of a no-deal Brexit and improved risk sentiment. The Pound is holding position in early trading today.
This morning sees Mortgage Approvals and Consumer Credit figures being released, but these will not have a perceivable impact on the rates. Brexit headlines will continue to be the main source of volatility.
?? EUR – After a strong period for the Euro, it faced a setback yesterday as reports surfaced that Italy’s Government will seek assistance from the ECB for a fresh round of bond buying to avoid a sovereign-rating downgrade.
Today sees a raft of sentiment and confident figures being released for the Eurozone relating to business, consumer, services and industry. It is unlikely that this will have a significant effect.
?? USD – The Dollar index struggled near a four-week low against a basket of six major currencies, dragged down by the Pound’s rally yesterday. GDP was found to be 0.1% higher than expected for Q2, rising to 4.2% and, allied with Personal Consumption Expenditure figures being higher, helps to confirm that the Fed will continue their rate hiking cycle.
There is no significant data today and, as with the other currencies, it is likely that pre-existing economic and political conditions will determine rate movements more than newly released data.
08:30am: UK Mortgage Approvals – 64.768K
This morning: Various non-crucial EU data releases
Summary: Pound makes sharp gains after EU comments.
US Dollar near 4-week low.
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