Yesterday saw the first day of Sterling gains post-EU referendum. GBPUSD almost broke 1.3400 but failed to sustain momentum, falling back below the 1.3300 threshold. Political uncertainty and the economic implications of the UK's decision to leave the European Union is weighing on investor sentiment and restraining any sharp recovery for the British Pound.
The market’s eyes will be on the EU Summit and political developments in the UK today. Labour leader Jeremy Corbyn received a vote of no confidence yesterday, whilst the Conservative party nominations for leadership open today. With May’s data on net lending to individuals due for release today, we may have our first insight into the effects of the referendum campaigning on the UK.
Across the pond, the final US GDP report for Q1 showed a 1.1% gain yesterday, against the consensus of 1%. The report also showed that corporate profits grew for the quarter. However, consumer spending fell short of expectations which will worry Fed chair Janet Yellen as she weighs up the timing of the next interest rate hike.
The Euro firmed up slightly on Tuesday, although underlying sentiment surrounding the common currency still remains negative. This is due to the uncertainty around the European economy and the “contagion risk” of further EU referenda in other countries. GBPEUR spent yesterday trading between 1.2000 and 1.2100, as investors wait for fresh news before deciding on a clear direction. The Pound did post narrow gains against the Euro, with the pair opening this morning at 1.2059.
Data to Watch: 8am EUR German Preliminary CPI m/m, Spanish Flash CPI y/y. 9:30am GBP Net Lending to Individuals m/m, UK Mortgage Approvals. 1:30pm USD Core PCE Price Index m/m, USD Personal Spending m/m. 3pm USD Pending Home Sales m/m. 9:30pm US Bank Stress Test Results.
Posted in Daily Market News on Jun 29 2016
The Sterling sell off continued on Monday as the uncertainty surrounding the political stability of the UK has clearly panicked investors. The Pound fell to fresh lows against the Dollar as the negative sentiment caused the pair to break below the 1.3150 level.VIEW FULL ARTICLE
Posted in Daily Market News on Jun 28 2016 by William Kemp and the Sales Team