May standing firm on hard Brexit

9 January, 2017

Ashley Finill

Last week saw the markets re-open for the start of 2017 and in the first trading week has already seen rates act in a volatile way. With the first raft of data being released across the board Sterling lost out on both the Euro and the US dollar, the Euro clawed back over 2 cents on The pound whilst the Dollar brought Sterling back towards the 31 year lows which we reached back in October. This can be viewed as a troubling time for Sterling as now the festive period has now passed and the markets are back in full swing with all investors and major sectors are back to business as usual. More light has been shed on Brexit with the departure of Sir Ivan Rogers on Wednesday as an ambassador to the EU on behalf of the UK putting the UK leaving the EU back on the news and in the minds of investors which has had an impact on sterling and one of the main reasons why Sterling performed poorly.

Further to events on Brexit, Over the weekend Theresa May was interviewed and took a very bullish stance towards the UK leaving the EU again highlighting that it will be a hard Brexit. The UK’s Supreme Court could also rule on whether the UK government should seek parliamentary approval before trigger article 50 which is still scheduled for March this year. This week could be vital for Sterling with the media bound to speculate on Theresa May’s interview and should the Supreme court give the go ahead to vote in parliament which is rumoured to be the outcome then expect Sterling to plummet to lows we saw back in October last year and head towards the sub 1.10’s.

Thus comes a new week and with plenty of data releases to come which could trigger movement in the rates, here is a look at the week ahead.

07.00am – Germany – Trade Balance, Current account, Imports & Exports
08.15am – Switzerland – Retail sales
10.00am – Eurozone – Unemployment rate
15.00pm – US – Labor Market Conditions Index
20.00pm – US Consumer Credit Change

00.30am – Australia – Retail Sales

09.30am – UK – Manufacturing and industrial
13.15pm – Canada – Housing starts
15.00pm – UK – NIESR GBP Estimate
18.00pm – 10-Year Note Auction

00.01am – UK – RICS Housing price balance
07.45 – Eurozone – Consumer Price index
10.00am – Eurozone – Industrial production
12.30pm – Eurozone – ECB Monetary Policy Meeting Accounts
13.30pm – US – Initial Jobless claims
13.30pm – Canada – New housing price index
19.00pm – US – Monthly budget statement
21.45pm – New Zealand – Electronic Card retail sales

00.00am – US – Fed’s Yellen Speech
13.30pm – US – Retail sales

A busy week ahead so make sure to stay in contact with you account manger here at Currency Index for friendly Guidance and information for all your currency requirements.