On Friday, Sterling remained remarkably strong against an overall stronger Dollar. There was talk about a special relationship between the USA and the UK, and the Trump government could give the UK a better negotiating position in the Brexit process. Cable touched five-week highs of 1.2674 before easing later in the session, but still closed in positive territory at 1.2596. Against the Euro, Sterling pushed as high as 1.1672 before closing the day at 1.1594.
Theresa May will make her first foreign policy speech at the Lord Mayor's banquet in the City of London tonight. In light of an impending Brexit, a Trump presidency and a lack of UK economic data, this will have more currency impact than it would otherwise. The UK data this week will be arriving on Tuesday and Thursday with focus on Tuesday’s inflation data and testimony from Bank of England Governor Carney.
In the US, the University of Michigan consumer confidence index printed 91.6, the strongest reading for five months. There was also an increase in the inflation expectation readings which will be significant for Fed policymakers. Fed Vice-Chair Fischer maintained his preference for a gradual increase in interest rates, although there were no specific references to December’s policy meeting.
Congressional testimony from Fed Chair Yellen will be watched closely this week especially as the Federal Reserve’s relationship with Congress will be a crucial focus over the next few months. This is due to Trump’s election and Republican majorities in both the Senate and the House. US data releases will also be important this week with a particular focus on inflation.
Data to watch: 10am Euro Industrial Production, Month on Month, Year on Year. 3pm Mario Draghi Speech. 7pm Theresa May Speech.
Posted in Daily Market News on Nov 14 2016
Sterling gained significant support on Thursday, breaking through the 1.1500 level against the Euro for the first time since the beginning of October. The Pound pushed above 1.2550 versus the Dollar; levels last seen just before October's flash crash.VIEW FULL ARTICLE
Posted in Daily Market News on Nov 11 2016 by William Kemp and the Sales Team