The Brexit Effect

On Friday the markets saw another volatile day partly down to Brexit related issues, a great example of how comments made by officials can very quickly have a direct affect on the rates. The Pound took a hit on Thursday losing almost a cent against the Euro and Dollar following news that little progress had been made during the fifth round of Brexit negotiations, and comments made by European Union’s chief Brexit negotiator Michel Barnier saying that they were “in a position of deadlock”. Leaving investors with the prospect that no deal could be reached.

However in the space of just 24 hours the markets saw a strong reversal following reports that the EU will look to offer the UK a two-year transition period which has provided a slightly more positive light. This back and forth between UK and EU officials is having serious effects on the rates which has a direct effect on those of you with Sterling in hand and an upcoming requirement. With no solid answers provided yet for a firm Brexit deal we can expect this volatility in rates to continue.

So for those of you with an upcoming requirement to secure currency, and are concerned about which way rates will move next, it may be worth dropping us a call here at CI to talk through the options we provide to help you. Our stop loss and limit orders could be the solution to help you secure for funds.

The Week Ahead:

This weeks data should help provide investors with some more information and add to speculation on whether an interest rate rise is likely to happen beyond November. UK CPI data is due on Tuesday and will be on to watch as forecast is set to read 3.0%, up from 2.9% in the previous month. A reading below this could see the Pound come under pressure. Wednesday we have wage data out and should the result be better than the previous 2.1% we could see some movements in rates. Also mid week, we have a speech from the Fed’s William Dudley. Any mention on changes to the Fed’s outlook to inflation could see the market react. On Thursday the US post jobless claims and the UK release retail sales figures which are set to read below  the 1.0% result we saw in Augusts figures. This data provides a good indication of the UK’s consumer confidence so any result above the -0.2% that is expected could give the Pound a boost. The week rounds off with the EU Leaders Summit where the EU’s heads of State meet to discuss any progress made on Brexit so far. We could see new headlines on this matter so one to keep an eye on.

Monday

10:00     EUR       Trade Balance (Aug)

15:30     CAD       BoC Business Outlook Survey

22:45     NZD       Consumer Price Index

Tuesday

09:30     GBP       Producer Price Index & Consumer Price Index

11:00     EUR       Consumer Price Index

14:15     USD       Industrial Production

15:00     USD       NAHB Housing Market Index

Wednesday

07:00     EUR       EU Extraordinary Economic Summit

09:30     GBP       ILO Unemployment Rate, Average Earnings & Claimant Count Rate

GBP       Inflation Report Hearings

13:00     USD       FED William Dudley Speech

13:30     USD       Building Permits Change & Housing Starts

15:30     USD       EIA Crude Oil Stcks

Thursday

Overnight            JPY         Imports, Exports, Merchandise Trade Balance & Foreign Investment

Overnight            AUD       Participation Rate, Unemployment Rate, & Employment Rae

09:30     GBP       Retail Sales

13:30     USD       Continuing Jobless Claims, Initial Claims, Philadelphia Fed Manufacturing Survey

Friday

EUR       Council Meeting

09:30     GBP       Public Sector Net Borrowing

13:30     CAD       Consumer Price Index