27th February 2018 Market Update
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?? GBP – Yesterday morning Sterling opened the week in a strong position as hawkish remarks from Sir David Ramsden on Sunday suggested he will support further interest rate rises in the nearer future. He was quoted in the Sunday Times as saying “certainly relative to where I was, I see the case for rates rising somewhat sooner rather than somewhat later.”
Despite the positive open, Sterling lost its footing yesterday afternoon. Notably Jeremy Corbyn committed Labour to being part of the customs union, adding further political pressure on the Tories.
?? EUR – Mario Draghi testified yesterday in front of the European Parliament Economic and Monetary Affairs Committee. Draghi reiterated that there needs to be regulations over clearing houses in London, but didn’t go so far as to recommending the uprooting of these institutions. This appeared to have little impact on the market.
German and Spanish CPIs are released this morning, with both expected to be higher than previous at 0.5% and 0.9% respectively. Strong readings will further suggest that the Eurozone is beginning to be ripe for an interest rate rise.
?? USD – The only thing of interest from the US currency markets yesterday was that FOMC member Quarles spoke at an economic conference. However once again he appeared to say nothing of consequence. Despite this the dollar was the best performing major currency yesterday strengthening in particular against Sterling.
Today core durable goods are released at 1.30pm and are expected to come slightly worse than previous at 0.4%. At the same time Fed Chair Powell will testify in front of the House Financial Services Committee. Anything said of consequence will probably affect the dollar. At 3.00pm consumer confidence is released from the US.
13:30pm: Core Durable Goods Orders, Fed Chair Powell Testifies
15:00pm: CB Consumer Confidence
Summary: Sterling started the week in a strong position following an interview with David Ramsden in the Sunday Times. Across the afternoon it lost any gains made although there was very little data from the currency markets yesterday. Today CPI is being released from Germany and Spain, with core durable goods and consumer confidence data being released from the US this afternoon.
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