Markets remain flat

23 May, 2018

Nakhil Mahra

Yesterday saw no major changes in the currency markets with very little data to go on, which is the norm come this time of month. Trading within a tight range with Sterling under pressure with both USD and EUR currently leading the way with investors, this trend seems to be continuing unless we have a major breakthrough with Brexit. How negotiations pan out will dictate Sterlings value and provide key information on the direction we are headed. Following UK’s vote to leave last year, Italy could follow yet. With Guissepe Conte, a law professor, running for Prime Minister, he could trigger Italy’s own exit from the EU. However, currently far from being the favorite to win it is a situation to monitor over the coming months. For those of you holding out for the 1.15 mark, why not take advantage of our limit orders where the market will buy your currency for you should we see a peak in the rates, speak to your account manager to discuss this option.

Things seem to be far from rosy in UK government however, with another snap election being quietly talked about. Rumors have been spreading over the last couple of days in parliament of another snap election due to the lack of progress made in the UKs exit strategies. Some backbenchers are questioning Theresa May’s ability to deal with the situation and if she is the right person to lead us in this difficult period. Main concerns surrounding the split in the Tory party and if May can unify them all in a single direction. Although currently a handful of MPs are talking about this, it doesn’t take long for fire to spread and for it to build up steam. With the last snap election leaving the Pound in turmoil, and resulting in May losing her majority, should we have another election, where would that leave the Pound?

Today is a busier day on Eco stats with GBP CPI out at 9.30. should this be negative, we could quickly lose further ground on all major currency pairings. With so much going on stay in touch with your account manager to discuss your best options.