Sterling Rallies On Deal Talks
8 December, 2017
Yesterday was a mixed bag mainly sentiment led, which saw sterling rallies towards the close of trade over Anglo/Irish deal talks. At the time of writing, news wires were reporting a deal could be imminent between the UK and Ireland. Any deal will need to be satisfactory to the EU, the Irish Republic, Theresa Mays government and the DUP who are keeping her in power (just).
The only data of note yesterday was the EU GDP reading, which was expected to remain unchanged from the month before at 2.5 percent, surprisingly increased to 2.6 percent. With this we would expect some euro strength, but we saw a brief weakening first against sterling and the dollar. GBP/EUR went up to the peak of the day briefly, but with no deal agreed for Brussels, sense took over and investors sold off sterling as the rates plummeted nearly a cent against the pound.
Positive Murmurs From Brussels
As lunchtime came and we looked forward to the US markets opening positive murmurs were coming out of Brussels, with an Irish official saying “its moving quite quickly at the moment”, adding “I think we’re close”.
With such positivity around the talks the pound started to claw back its losses, and we saw strong gains made across the board as sterling rallies. The pound finished up 1.5 cents against the Loonie, a cent up against the greenback and just above its previous peak against the single currency euro as the UK markets shut.
Talks were set to continue well into the night to get a deal ironed out so Theresa May can get on with making a deal with the EU and pave the way to opening up free trade talks finally.
Moving Money To New Zealand
For those looking to send money to New Zealand, will be interested to note the kiwi has lost almost 13 percent to sterling in the last six months hearing back towards that magical 2 to the pound level not seen for some time. Political unrest and a softening of monetary policy to allow a weaker dollar are the main catalysts, but with such a strong resistance ceiling on the horizon, anyone looking to send money to New Zealand might find these levels are near as good as they’ll get for some time. Speak to one of the team if you’d like t take advantage.
The Day Ahead – further Sterling rallies?
Today will likely be led by events in Brussels, but we do have some eco stats to contend with. First off German trade balance, followed by UK manufacturing and industrial production figures at 9.30am. After lunch we cross the pond for US unemployment and average earnings plus the ever key non farm payrolls. This always throws up some volatility so buyers beware should you need to send money to the States. Call one of the team today to discuss the ins and outs of your currency needs and make the most of your pound.
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