17th February 2020 Market Update
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?? GBP – The dust has settled following last week’s Cabinet reshuffle and the pound has calmed down too. The most common question we are getting at the moment is what can keep GBP on an upward trajectory moving forward.
With Brexit no longer on the front pages, focus for the pound moves back on to the economic data. While there is none today, tomorrow’s look at the jobs market, Wednesday’s inflation numbers and Thursday’s retail sales announcement will give an updated look at what is going on under the bonnet of the UK economy. Most of these numbers are measuring performance after the election and therefore have the chance of adding to the optimism around a ‘Boris Bounce’.
Any news from Westminster as to whether the planned Budget due on March 11th is to still go ahead will also have a bearing on the pound’s performance.
?? EUR – You have to feel sorry for the euro, it really has few friends at the moment. It is being sold for several reasons and, there is very little chance that will stop anytime soon. Manufacturing confidence numbers due on Friday morning may be able to stop the rot in the short-term but we cannot see that the single currency is set to reverse higher anytime soon.
?? USD – Today is President’s Day in the US and while most of the States is enjoying a long weekend the dollar will be looking to build further gains. News out of China that more stimulus will likely be put into the Chinese economy to combat a slowdown caused by the Coronavirus may help but we must be mindful that the recent uptick in the USD, especially against the EUR, may cause officials – notably one Donald J Trump – to advocate for a weaker USD.
GBP: Jobs, wages and inflation data crucial to sustaining sterling’s rebound
EUR: Can easily continue recent weakness
USD: President’s Day holiday should keep things quiet
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