Yesterday the pound remained flat against the dollar and euro as eco stats had little effect
13 November, 2019
Yesterday the pound remained flat against the dollar and euro as eco stats had little effect.
UK average earning data (which is a leading indicator of consumer inflation), came in below expectations at 3.6%, relative to the forecast of 3.8%. And, the UK’s unemployment rate (which is generally viewed as a lagging indicator of overall economic health) came in slightly better than expected at 3.8% compared with expectations of 3.9%. While these figures had little effect on the value of the pound yesterday, it’s important to remember that they’re a major consideration for those charged with steering monetary policy.
As far as the pound is concerned, the markets are clearly waiting for developments on the political front as the UK readies itself for the general election. Are we to believe the opinion polls and expect a Tory majority? Is a hung parliament still a real possibility? What effect could the rise of Farage’s Brexit party and Liberal Democrats have on the value of the pound? Or, would a Corbyn victory lead to a second referendum, a softer Brexit or no Brexit at all?
For those who need to transfer currency within the next 6 months, the current climate represents a rare opportunity to be proactive and to consider how to remove the risks associated with volatile exchange rates. If you haven’t already spoken to your currency consultant about how forward contracts can be used to reduce the risks of an uncertain election outcome then get in touch today.
In terms of eco stats, out today we have a raft of data coming out for the Aussie and Kiwi dollar including; the NZD interest rate, Reserve Bank of New Zealand official quarterly report and interest rate statement. Lastly, in the UK and US there is consumer price Index data y/y (CPI) which is the most important piece of inflation data to consider.
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