Up and down day for Sterling

6 March, 2019

Nakhil Mahra

Yesterday was a topsy turvy day for GBP seeing it drop half-cent initially before recovering late in the day. After last week’s gains, the general feeling amongst analysts is that an extension is now largely priced in and any further gains will be limited. With eyes now on next week’s votes, where we could see Brexit being delayed, how long for however remains the question.

Yesterday saw services PMI release better than expected figures at 51.3, anything over 50 is usually seen good for the country and the currency. Keeping the momentum going from last week. The biggest news of the day possibly was Carney suggesting that a no deal Brexit would cause chaos and market volatility for a period of time. Announcing an auction, a weekly sell of Euro’s to avoid the risk of banks running out of cash. With a number of insurers and asset managers still considering moving their base to the EU. BMW also claiming that ‘they would be unhappy with a short-term extension’ on Brexit. With a couple of big-name manufacturers already announcing they would be moving production out of the EU, another would be a major blow to the PM and economy.

Today we see a quieter day in the markets with the only data releases coming from Canada, with the BOC rate statement at 3pm.