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Sterling moves continue to be muted

7th June 2017 Market Update

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?? GBP – With no data to go on, Sterling hit a high against the dollar that it hasn’t seen for almost two weeks, before phasing back down slightly.
Investors continue to push for a ruling Conservative party in Thursday’s election and were buoyed by the latest ICM poll which reflected an 11 point lead for the Conservatives. However, another poll from ITV put the Conservative lead over Labour by only 1 point, which is of course hugely contrasting.

The only data today has been the latest house prices data from Halifax bank which revealed that house prices only increased by 3.3% in the 3 months leading up to May, down from 3.8% previously. Unsurprisingly, no movement on Sterling following this data.

?? EUR – No data for the euro worthy of note, however the Eurozone investor sentiment hit a decade high, as all things seem to be on the up for the single bloc.

No data of note from the Eurozone today but it is worth noting that investors are looking for a more upbeat tone in tomorrow’s ECB monetary policy meeting, which could well drive the euro stronger.

?? USD – Similarly, there is an empty calendar for the dollar today. A US business lobby has however fired warning shots to the Trump administration, saying that a failure to reform the tax system will massively damage the US economy, by overruling big companies and their plans to invest and hire.

Markets are braced for former FBI director, James Comey’s testimony tomorrow and the impact this could have on the reputation of US President Donald Trump.

 

Key Announcements

No key announcements today.

 

Our View: No major moves expected today as markets wait for tomorrow’s ECB meeting, James Comey’s testimony and of course the UK elections.
 
With continued uncertainty around Thursday’s election, one of two outcomes seem likely. Whilst a majority Tory victory would certainly boost the pound, a hung parliament would mean further instability issues as we go forward to Brexit negotiations and thus, the pound could well weaken off.

 

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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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