Markets volatile G20 summit leaves Brexit terms uncertain

Yesterday was a busy day in the way of data releases, whilst we also saw the G20 summit in China where Theresa May addressed some of the issues surrounding Brexit. It certainly seems for PM May that detail is key to any decision, as she remained extremely aloof as to when article 50 will be invoked, only saying that it would not be this year. Stating that she did not favour a “points system” for immigration but rather one of more governmental control, also saying that she would not guarantee the £100 million a week saving by leaving the EU will be spent on the NHS or reducing energy bills- interestingly 2 of the key promises made previously by the Leave campaign. This has only split groups in the UK further with some feeling that promises are already being broken without a clear date for invoking article 50, leaving uncertainty over the UK. Whilst others argue that a slower more detailed approach will be a safer route to guide us through Brexit with the least disruption. Whichever camp you sit in, uncertainty is never a good thing for investors and consequently currency, so it seems the turbulence we have seen will continue for several months.

In terms of data it was another surprising day for the Pound as we saw UK market services data show huge growth to 52.9 from a 47.4 and a predicted 50.0. As a result and aided by the fact that the Eurozone showed a decline in the same release the pound gained in the mornings trading stealing ¾ of a cent against the single currency, taking it to new highs since the recent Bank of England rate cut. Against the USD, GBP gained half a cent. However these gains were short-lived and by the end of the day GBP/USD rates had returned to open levels, whilst the single currency clawed back half a cent against the pound. With some feeling that at present the pound is overpriced given its recent gains coupled with the uncertainty still looming over Brexit, this quick correction is perhaps unsurprising.

Today we have a number of data releases to watch out for. In the early hours we have already seen the RBA Interest rate decision, which was left unchanged at 1.5%. Whilst Switzerland posted a hugely better than expected GDP figure – up to 2% from a previous 1.1% and with a prediction of a contraction to 0.9%. This morning we see further data released from the UK bond auction and also Eurozone GDP figures. However the big release of today is from the U.S and comes this afternoon as we see ISM Non-manufacturing PMI, which will be keenly watched for any hints towards timing for the FEDS next interest rate hike, with present probability for a September hike at around 15%. So should you have any upcoming transfers give you Currency Index broker today for some friendly and professional guidance on how to get the most out of your transfer in a market where volatility will likely remain high for some time.