Investors Remain Cautious Over Sterling

Post Bank Holiday weekend saw the pound make some gains across the board as trading returned to the UK after the long weekend.

With a lack of any UK data for investors to go on, it was more a correction to the downside trading we saw to the end of last week and Monday, as European markets remained open on Monday as the UK and US were shut. With May and Corbyn taking part in a televised interviews on Monday evening, the polls are no clearer as to who will win the General Election next week so the pound remained under pressure, only managing some small gains against the euro and dollar.

Over the course of the day, the pound was up nearly a cent against the dollar and over half a cent up against the euro, but unfortunately with the euro held in higher regard by investors, with the potential the ECB may cut their current QE program when they meet on the 8th June (the same day as the UK elections) giving it strength, the pounds gains were short lived and as Wall Street opened, the gains slowly trickled away.

The only data of note came for North America in the afternoon as US inflation figures released on target while over in Canada, industrial production and current account figures came in under expectations, but despite that, still managed some late in the day gains, clawing back ¾ of a cent from the pound.

A sign of the times, as sentiment is clearly not with the pound at present. Brexit worries, underlined by political unrest as Brits struggle to see which of a bad bunch to vote for, means the chances of a hung parliament are a very real concern and will most likely keep the pound under pressure until the election results at the end of next week.

Today we have UK mortgage data and money supply figures, while the EU release inflation and unemployment data. After lunch the Canadian GDP figure comes out before house sale data, PMI and the Fed’s Beige Book release, giving an overall view of the economy as it stands.

If you have a transfer to make beforehand, or in the following weeks then it may be wise to look at booking it sooner rather than later. We don’t know how the election will go or how markets will react, but we are already seeing signs of sterling weakness in the run up so for those risk averse among our readers, give one of the team a call today and mitigate all the risk without delay!