Currency See Saw Back In Effect
17 May, 2018
On another day with no UK data to write about, we were left to releases elsewhere to guide investor sentiment.
We were EU data heavy with German and EU inflation figures released in the morning which all came out as expected, with all showing no different from the month before with German coming out at 1.4 percent and EU coming in lower at 1.2 percent. As a result of this on par data, investors decided to sell euro positions with the single currency losing ground against the pound and US dollar.
Next up was a speech from ECB chief Mario Draghi, but with little surprises mentioned it had little effect with the damage to the euro already done. After lunch, the US releases industrial production which beat forecast plus crude oil stocks posted lower both adding to the appetite for the greenback and saw the dollar make some small gains against the pound.
Overall, without any real key posts, we saw the pound and US dollar rally off a weak euro while the pound traded fairly flat against the dollar, trading within a ¾ euro cent and half a USD cent over the day.
Today is yet another quiet day, with nothing of note for the UK or EU, apart from speeches at 11.30 am and 1 pm from ECB Vice President Vitor Constancio. After lunch, we have US jobs data and a manufacturing survey while the day rounds off with a speech by Bank of England’s MPC member Haldane, sandwiched between a couple of Fed member speeches.
Not much to go on but if we see positive US data, the currency see-saw strike again with a weaker euro, but buyers beware, if the figures are negative the opposite could be on the cards. So if you have a euro purchase to make in the coming days or weeks, it might be worth taking the gains early on and locking in a deal. Speak with a member of the team for some friendly guidance on your upcoming requirement.
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