Brexit Bus rolls on, data could be critical this week

The pound has seems to remain relatively range bound the last couple of weeks, with it moving with around a 0.75% -1% range across the board. As the ongoing Brexit uncertainty plays on, this is perhaps unsurprising, as markets wait for a clearer picture as to whether it will be Boris or Hunt and a Deal or No-deal.

Interestingly if we look at GBP>EUR rates these are currently sat almost bang in the middle of where they have been at their peak, and where they have been when No-deal looked a possibility – with about 4% left either side. Clearly the market is sat on the fence at present, and whilst we won’t have more clarity until the result on the 23rd, downside risk is still very high as currently Boris is favourite, and is much more prepared for a No-deal than his rival.

Perhaps this is a bluff, but should he win the race we could see rates push down comfortably by the 4% we saw them at under May when it looked like we were heading for a no-deal. It is perhaps just a question of whether the Pound will hold out until the 23rd, or if the break will happen prior?

With sentiment on pause, market focus will at least in the short term return to data. Wednesday sees UK GDP data released alongside Industrial and manufacturing production, which could see movement. Equally data elsewhere could well see rates move with a number of data releases elsewhere in the world.

With the Pound poised ahead of a potentially huge drop later this month, can you afford to take the risk and wait?

Speak to your broker today for some friendly guidance on some of the ways we can help you to reduce the risk of this, including forward contracts and market orders.

Should Boris win, there is a real chance transferring 100k could end up costing you 4k more in the coming months.

Monday
08.30 EUR Sentix investor confidence
23.01 GBP BRC retail sales data

Tuesday
12.45 USD Fed chair Powells speech
N/A NZD Governor Orr Speech

Wednesday
07.00 EUR Non-monetary policy meeting
08.30 GBP Trade balance data, Industrial & manufacturing production and GBP.
14.00 USD Fed Chair Powell Testifies
14.00 CAD Interest rate decision, Monetary policy statement and press conference
18.00 USD FOMC minutes

Thursday
06.00 EUR German CPI data
09.30 GBP Financial stability report
12.30 USD CPI data
14.00 USD Fed Chair Powell testifies

Friday
02.00 CNY Import and Export data
04.30 JPY Industrial production