Focus back on Brexit for the Pound

4 October, 2017

Paul Newfield

paul newfield currency indexYesterday, with little in the way of major eco-stats, the focus was back on Brexit for the Pound. Theresa May and Boris Johnson both gave interviews, as part of the Conservative conference, yet again going over old ground. They said that the Tories and Britain generally need to do more, giving the UK the future it deserves. The theme of exiting pessimism and remaining of positivity was covered. MEPs meanwhile have voted to veto any continued Brexit talks until there is a major breakthrough. Quite how there can be a major breakthrough without ongoing talks is a question for those over in Brussels.

Catalan Independence

What will happen in Europe’s south west peninsula, by the end of this week, is anyone’s guess. The autonomous region of Catalunya has voted by huge majority to cut themselves adrift from the rest of Spain. The Catalans claim they will announce independence within days, whilst the Spanish government insists the decree is unlawful. Despite the huge upheaval, the Euro overall doesn’t appear to have lost any significant strength. If it is indeed announced successfully, there could be some market fluctuations, so worth following closely.

UK PMI Versus Euro PPI

Yesterday morning saw UK Purchasing Managers’ Index (business conditions in UK construction sector) figures published under expectation. The stats were also lower than the previous level and this caused the pound to continue its weakening against both the euro and the U.S. dollar. With the pound now having dropped over two cents since the highs of seven days ago, it needed help. The unwelcome positive return (for Euro buyers) from the European Producer Price Index, up 0.5% on the previous score, did little to assist. The pound continued its slow decline before a very small improvement in the afternoon following the U.S. opening bell.

Big day ahead

Today is a big day ahead with a plethora of markit services data from many countries in the EU and from the UK. These follow the ECB’s non-monetary policy meeting at 08:00. Generally this is a meeting about decisions other than Q.E and interest rate decisions, focussing on day to day operations. European retail sales figures are due at 11:00 with U.S. markit services, PMI, employment, mortgages, manufacturing and crude oil stocks due between 12:00-15:30. Lastly we have the ECB’s Mario Draghi and the Federal Reserve’s Janet Yellen speaking at 18:15 and 20:15 respectively. Due to the sheer number of data releases and their significance, as well as Brexit for the Pound, it is advisable to stay in close contact with your broker so they can guide you to the better deal.

brexit for the pound