Nine Day High for GBPEUR Evaporates

With the pound still very low against the USD, yesterday morning saw sterling rally against the euro, reaching its highest level for nine days with an optimistic outlook for potentially reaching levels similar to a month ago. But this was not to be, as between noon and 5:30 pm it lost nearly half a cent. The vast swathe of inflation figures yesterday morning came in mixed with RPI coming in negatively, PPI an assortment and the important CPI up to 2.5%, an improvement of 2.4% previously. Between the close of business yesterday and this morning, we have already lost another half-cent against the euro.

The continued risk of further major drop-offs in the rate should always be kept in mind and with the govt due back from their recess in less than three weeks, any further news regarding Brexit could kick off higher levels of volatility, so it may be shrewd to buy or lock in currency levels sooner rather than later.

With it being a religious holiday in the predominantly Catholic countries of Italy, France and Spain, there was nothing of note from Europe all day. And so it was over to the US; their retail sales coming in, surprisingly at a huge improvement, at 0.5% instead of the predicted 0.1%. Elsewhere, non-farm productivity was way up. Conversely, industrial production figures were very poor.

Today is a fairly quiet day for eco-stats and sees only retail sales from the UK at 9:30 and building, housing and employment data from the US at lunchtime. Keep in touch with your account manager here at CI to be kept fully informed of the outcome of today’s’ data releases.