Average Day for Sterling; Currency Index Turns 10 Today

28 September, 2018

Simon Eastman

Generally, an average day for sterling yesterday which stayed fairly stagnant across most major currencies with little data to go on for UK investors.

Sterling dropped against the US dollar, possibly some profit-taking following recent gains after the Fed raised interest rates the previous night, which was all but priced in fully hence little movement at the time. The stronger dollar also led to a weaker euro, not helped by some lower than expected eco-stats for the Union in the morning. We had money supply figures and an economic sentiment survey which both missed forecasts. German inflation seemed to fall by the wayside at lunchtime ahead of US GDP which saw an increase from 3 percent to 3.30 percent over expectations, leading the way for the dollar to rally. We saw the dollar gain half a cent against sterling and a cent against the euro over the day, much of that propelled from the GDP release.

The central banker speeches from ECB’s Mario Draghi, BoE Mark Carney and Fed Powell, seemed to have little effect on the currency markets as they happened, with sentiment already with the US dollar, for now.

One big mover against sterling was the troubled Turkish Lira, which clawed back over 2 percent over the day. For those looking to buy property out there, or who have property already and will be needing funds in the coming months, it’s worth looking at booking a forward contract to secure your funds for future use. The rates are still good, but as we have seen, this can change rapidly.  Speak to one of the team today.

Today we kick off with German unemployment figures at 8.55am followed by UK GDP at 9.30am. We are expecting no change from the last reading at 1.30 percent YoY so any change to this should throw up some volatility, especially in the current climate of Brexit negotiations. At 10 am the EU release inflation data, where an increase is expected, moving up form their 2 percent target they hit last month. US inflation comes out at 1.30pm as does Canadian GDP. After lunch, the ECB’s Praet speaks, followed closely by the BoE’s Ramsden, but whether these will have much effect is debatable, going on yesterday’s central bank speeches. Worth keeping in touch with a member of the team here at CI all the same though, as plenty to go on beforehand and the possibility of month-end profit taking as positions are wound up as Q3 winds to a close.

And on that note, Currency Index are celebrating our 10th birthday today. Congratulations to all the team involved over the years and here’s looking forward to the next 10 years providing top class foreign exchange services. Now, where’s the cake?