Market continues to trade flat

4 July, 2017

Grace Rae

Yesterday we saw the continuation of turbulent markets as the Pound lost against its majors after posting a disappointing 2% decrease in results for June’s Markit Manufacturing PMI data, and moving the figure down to a 3 month low. A weaker sterling following the decision to exit from the European union is no helping the manufacturing sector as consumers have tightened on their spending thanks to poor wage growth. Unlike the UK, Eurozone Manufacturing gained further momentum in June, measuring at the best reading since April 2011. Continuing the trend of a strong Euro and keeping the exchange rate dancing in the same cent range we have seen over the past few weeks. The next focus for the Pound will be on the Construction PMI due this morning and services PMI data due out tomorrow.

A business friendly Brexit
As the election is now over – the Government’s focus now turn towards Brexit Strategy which is still due to go ahead for 2019. Most recently, Chancellor Philip Hammond had attended a dinner arranged by the Confederation of British Industry, where he had attempted to reassure a selection of the UK’s chief executives that he is committed to delivering a Brexit deal that prioritises the economy.

With many talks yet to come, it’s safe to say that the road ahead is set to be a bumpy one. And with the past few weeks being anything to go by, it could be a while before we see the Pound strengthen up to allow for the kind of rates we saw pre-election. Remember, the currency market is very reactive to political changes, and if you have a requirement due in the next few months and want to avoid the potential for further losses then contact your Currency Index broker today for some friendly guidance.

Our forward contracts are great for those whose capital may be tied up elsewhere but are not willing to gamble to the rates and wish to fix their currency to avoid any nasty surprises. And our Limit and stop loss orders will work best for those of you who have some wiggle room to play with but may be limited for time.

On the data front not too much to go off – UK Construction PMI due this morning at 9:30am – set to contract from previous figures but not by a large amount. At 10:00am, Eurozone producer price index followed by UK inflation hearings at 11:00. A quiet afternoon with only Canada’s Markit Manufacturing PMI due at 14:30pm.