A Lively Week for Politics

3 February, 2017

Grace Rae

This week has seen political turmoil continue to unsettle the markets with President Trump’s executive immigration order, and not well timed just after Prime Ministers Theresa May’s visit to the US, where she returned to the UK and faced an Anti-Trump petition to stop a UK state visit. MP’s spent two days debating the approval to trigger the formal process to exit the European Union where MP’s backed the Brexit bill by 498 votes to 114.

Yesterday Brexit Secretary David Davis set out a statement on the published white paper, Exiting the EU: New Partnership and MP’s continue to debate over the details surrounding the official exit. State side, President Trump continues to make headlines as he turns to Twitter regarding his disagreement with Australia’s PM Malcolm Turnbull.

Yesterday, was particularly a full day in the way of market focused events. In the morning UK Construction PMI figures showed a slow in January while Euro Producer Price Index for December was up 0.3%. The Bank of England posted a unanimous vote of 9-0 to keep rates unchanged at 0.25%, the Bank also upped their 2017 growth forecast to 2% this year and expectations for 1.6% in 2018 and 1.7% in 2019. Inflation seems to have remained relatively calm, and it looks like the Bank will not be in a rush for a rate hike while the economy still adjusts to the changes surrounding Brexit.

As a result off the back of the report, the Pound fell just over half a cent and rounded up to a full cent into the afternoon as investor confidence diminishes. In the afternoon, US Initial Jobless Claims showed a slowdown, Nonfarm Productivity also positive, up 0.3% but down 0.2% on Unit Labour costs.

Today, again lots of data out to potentially cause some market movements. This morning, many European Services PMI and EUR Retail sales due in the morning, then the afternoon is dominated by US data with Average Earnings, Non-farm Payrolls which is expected to increase, and Unemployment Rate all due at 13:30. These will be the ones to watch as historically this is what investors are interested in. Then in the afternoon US Services, ISM Non-Manufacturing PMI, and Factory Orders also due, as well as Canada’s Ivey Purchasing Managers Index due at 15:00.

With a long term view and away from daily economic data releases, the present economic issues could result in large movements in currency rates in the coming weeks. It would be wise to speak to your Currency Index broker today for some friendly and professional guidance on how you can protect your rate and avoid a costly disappointment.

Call us today on 01923 725725, and we will be happy to assist you.