Sterling slips to 1 week low against Euro
17 February 2017
Yesterday’s trading was another quiet day on the markets with both Sterling and the US Dollar losing out on the exchange rates. After digesting two consecutive days of softer UK data, the pound dropped nearly a cent against the Euro coming down from the peak rates seen early this week. GBP/EUR has failed to break a key resistance level this week and with no data next week at all, and Article 50 potentially just a few weeks away, its is quite likely that the best buying levels for the next few weeks have already been seen.
The US Dollar also underperformed yesterday despite strong housing and jobless claims figures in the afternoon. The struggling pound again matched the weaker greenback and cable remains flat within the same 1 cent range seen for nearly two weeks now. The dollar rally has seemingly run out of steam, but traders aren’t quite yet ready to start reversing their positions with speculation of a US rate hike next month.
This morning is the last key announcement for the UK until the end of the month, and unless the markets get figures significantly better than forecast, then expect the pound to continue trading sideways or lower between now and March.
UK Retail Sales are released at 9:30 am with analysts hoping for a positive bounce back to 0.9% growth in January after the dismal 1.9% contracted posted in December. If actual figures do need exceed these forecasts, then anyone still holding on for higher rates may wish to re-consider as the quiet week ahead, and the likelihood of Article before 9th March means that stability is probably the best to hope for in the short term.
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