Another Poor Day for Sterling
26 October, 2018
Yesterday was another poor day for sterling which saw further declines across the board.
The US dollar was the main winner, continuing its recent rally despite mixed durable goods order results, helped by comments from the ECB’s Mario Draghi who remained unchanged on his outlook for future policy. At the meeting the ECB left policy unchanged, describing the risks to the EU economy as “balanced”, despite the recent spate of weaker data releases.
In the afternoon’s trade, we saw some real movement with the US markets open after the ECB meeting, the euro lost over half a cent to the dollar. GBP USD lost a cent while the stronger dollar and weaker pound, as we still wait for a glimmer of a Brexit deal to emerge, meant the euro managed to make gains against sterling too, dropping over half a cent. This goes to show the state of the pound as German business climate figures also posted lower than expected early in the day, but investors still favoured the single currency over sterling.
Elsewhere, the Aussie dollars recent run continued gaining nearly 2 cents against sterling. In the past two weeks, the AUD has gained 3.5 percent over sterling, making a significant difference to anyone looking to make the move down under. Anyone looking to make the move in the coming months might be well placed to lock in funds on a forward contract just in case its run continues, aided by a continued lack of a Brexit deal.
Today we round off the week with German Growth for Knowledge (Gfk) consumer confidence survey results ahead of US GDP at lunchtime. This afternoon the European Central Banks President Draghi speaks alongside ECB member Coeure at 3 pm and 3:15 pm respectively.
Investor sentiment is likely to prevail once again ahead of the key US releases this afternoon, so it may be prudent to speak to one of the team this morning if you have an upcoming currency exchange to make.
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