GBP falls following further negative Brexit speeches
3 October, 2018
Yesterday the pound lost some ground particularly against the Euro following a slowdown in construction growth in the UK. Construction PMI data posted 0.4 lower than the expected result of 52.5. However, the more probable reason for the Pounds decrease is down to comments made by former foreign secretary Boris Johnson during his speech at the Conservative party annual conference in Birmingham. He made comments regarding young people being forced out of the housing market, a bid for lower taxes and swiftly moved onto the topic of Brexit where there was more of the same talk regarding a poor Chequers deal and although many thought his speech would upstage the PM’s somewhat, it appeared that speculation he would be challenging Theresa May’s position was squashed.
The ongoing threat which remains is the issue surrounding the Irish borders. The D.U.P party continues to stand firm against not going for the new regulatory border checks proposed by the European Union, which means there could still force a no deal Brexit. Sterling has managed to keep a steady position against the euro recently, however, it is still incredibly sensitive the Brexit headlines and still has the potential to swing towards the downside. So if you have an upcoming requirement to buy Euro’s, Dollars or any other currency, you may want to look at securing a rate at these current levels to avoid any potential losses should Brexit talks suddenly turn south.
The day ahead:
Today, the data looks to revolve around Markit services PMI for the eurozone and the UK this morning and then over to the US in the afternoon. The Eurozone is also due to post retail sales and the US to post ADP Employment Change and towards the evening there will be speeches made by FOMC members Brainard and Mester and Fed member Powell.
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