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Sterling’s Friday gains erased this morning on political woes

13th November 2017 Market Update

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?? GBP – A plethora of data releases on Friday helped the pound to gather momentum across the board as industrial production, manufacturing, trade balance and GDP estimates all beat expectations with only construction output faltering. In addition, Brexit talks did not conclude bitterly, with the EU Brexit negotiator, Michael Barnier setting a deadline for the UK to clarify its financial obligations and saying that talks have achieved some progress. However, the European Commission slashed the UK growth forecast citing Brexit uncertainty as the main cause, which could stall any further pound strength for the short term.

This morning the pound has however lost most of what was gained in trading hours on Friday as 40 members of the Conservative party pen their names to a letter of no confidence in Theresa May’s leadership. A further 8 names to the list would see a leadership challenge.

In terms of economic releases there is nothing of note scheduled for the UK.

?? EUR – At the EU-Arab world summit in Athens, Greek PM Alexis Tsipras looked to drum up some investment as he stated that Greece is now one of the best countries in the world to invest in, having fought through years of austerity and recession to finally now show signs of economic recovery.

Apart from a speech by ECB Vice President Constâncio at the 20th Euro Finance Week in Frankfurt, we have no other releases today.

?? USD – Another quiet day on the data front on Friday, with markets still focusing on the Tax reform bill ahead of inflation figures later this week.

The US will release their monthly budget statement for October this evening, which is expected to show a bigger deficit than the previous month and thus could weigh on the dollar.

 

Key Announcements

?? USD – 19:00pm US Monthly budget statement

 

Summary: Last week data was weighted heavily toward the end of the week, with a barrage of UK data and a round of Brexit talks coming to an end on Friday. The news largely in favour of the pound helped the currency strengthen across the board. Though this morning, the pound has fallen back as the Conservative party air their concerns on the leadership of Theresa May.

 

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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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