Sterling Slide Falters

3 March, 2017

Simon Eastman

As the British law Lords hurt Sterling on Wednesday, placing an amendment to the PMs Brexit plans, delaying her optimistic triggering of Article 50 at next week’s EU summit, yesterday say the pound hold its own.

Helped by the better than expected construction PMI, which posted a slightly stronger growth figure of 52.5 over 52.2, the Pound made a turnaround heading up against its major pairings. It had lost a lot of ground over the past week though since talk of another Scottish referendum, so it had a way to go.

EU inflation and unemployment figures all came out as expected, so there was little to stop investors backing the pound although once the US markets opened, we had seen resistance levels hit and the rally faltered. Strong US jobs data gave the greenback a boost by half a cent, but trading was somewhat choppy in the afternoon and fairly range bound. For Sterling, the range was half a cent again both the dollar and single currency.

As the week closes, we end the week with a few key releases from the major markets. UK and EU Markit services PMI come this morning with growth figures expected from both, but can expectations be beaten? EU retail sales also come at 10 am ahead of the US open where we have Markit composite and services PMI alongside the ISM non-manufacturing PMI, all key economic strength indicators and even more relevant as investor sentiment towards a US interest rate this month, rose from around 50 to 85 percent over the week. More insight into this potential rate rise could come from the menagerie of Fed member speeches this afternoon, starting with Charles Evans at 3.15pm and finishing, of course, with Janet Yellen at 6 pm.

(Full list; Charles Evans, Jeff Lacker, Jerome Powell, Stanley Fischer, Janet Yellen)

Plenty of key releases to go on and a heap of keynote speakers to affect sentiment throughout the trade, with the pound being under pressure this week and the current dollar rally over a rate hike, it may be prudent to jump in early doors if you have a sterling exchange to make. Give one of the team a call today to discuss the available options.