Flat start to the week for Sterling
9 October, 2018
Flat start to the week for sterling with no data of note from the UK. Generally, global markets were quiet as the US celebrated Columbus Day and Canada enjoyed Thanksgiving while we only had industrial production figures from the EU and Germany.
As a result, having made big gains last week, the pound managed to hold onto them again the single currency on Monday, although lost ground to the US despite the national holiday over there. The dollar also gained against the euro, taking nearly a cent reaching some of the lowest levels for EUR/USD in some time. The euros demise came following a lower than expected industrial production figure plus a poor Sentix investor sentiment result, bringing a weaker euro and subsequent stronger dollar as the currency seesaw effect was clearly shown. This explains the stronger dollar against sterling rally we saw over the course of the day also, as the greenback gained a cent at its peak.
For those buying euros, your luck held out as we didn’t see any real correction, which following such a rise, we often see as investors realise their profits. A 3 cent rise in a fortnight is decent in anyone’s eyes, so we could still see gains taken. With that in mind, it could be prudent to lock in any future requirements now on a forward contract just in case.
Its another quiet day for UK data today with just the Financial Policy Committee statement at 9.30am. Before that, the Germans release trade balance and current account figures ahead of this afternoons trading session where we only have a couple of central banker speeches including MPC member Broadbent and Fed member Evans. The US and Canadian markets are back open and sterling still riding the slightly more positive Brexit news coattails, so make sure you speak to one of the team today in case this sentiment changes and the recent gains are erased.