Brexit Battle Continues
12 October, 2017
The Brexit battle continues and with no major market-moving data releases to note yesterday, the news focused on Brexit Talks. With recent news headlines suggesting a ‘no deal scenario’ could take place, speculation that Brexit talks could fail have ramped up. However during Prime Ministers Question’s Theresa May hit back saying “the UK is not ramping up a no deal scenario” adding she was working with the EU to negotiate a “brighter future for this country”.
There was also a slight contradiction in comments yesterday as earlier in the day Chancellor Philip Hammond had said that funding for a no-deal plan would not happen “until the very last moment”. Suggesting money should go to areas like the NHS or schools and not on an outcome which may or may not happen. Although Theresa contradicted him later in the day when she made it known that money would be put aside for “no deal” planning as and when it was necessary, striking a rather different tone to the chancellor’s “very last moment” comments. This divide in comments does not bode well for the Pound, and in order to make any gains back in the short term, we need to see a more solid outlook on a brexit agreement.
In the early evening, the FOMC released the minutes from its September meeting and unanimously voted to hold rates steady. The minutes also showed that officials remained optimistic about the economic impact of the recent hurricanes, and any decisions on a future rate hike will be dependent on the results of inflation data over the next few months. There was also mentions that another rate increase this year “was likely to be warranted”. The Federal Reserve currently predicts one more rate rise this year and three the next. So could we see another hike by December’s meeting?
The Day Ahead
Yesterday we saw the Pound continue to slide down closing the trading marginally lower than where it had opened against the Euro but held firm against the Dollar with no real change in the rates by close of the day.
Today we have EU industrial production data out this morning at 10:00, US jobless claims after lunch at 13:30 and a speech by ECB President Draghi in the afternoon at 15:30. All have the ability to move the rates so if you have an upcoming requirement for currency due in the coming weeks or months and are concerned about the current rates, give us a call. Our friendly brokers will be happy to have a chat with you to discuss the options we can provide. Call us today on 01923 725725.