- After 8 consecutive days of sterling losses against the euro we finally saw the pound gain some ground back yesterday.
- The Office of National Statistics corrected an error revising up both Q1/Q2 labour costs which would result in a higher inflation reading. This renewed expectations of Bank of England tightening measures and hence we saw sterling post gains on Monday.
- However, the pound will do well to keep up this momentum with Brexit negotiations deadlocked and PM Theresa May allegedly facing a power struggle within her own party.
- The Bank of England’s economic projections are based on the assumption of a soft Brexit and these could change should a disorderly exit from the EU surface.
- GBP/EUR opened at 1.1131 and traded as high as 1.1227 before closing at 1.1192. GBP/USD followed a similar course opening at 1.3093, trading up to a high of 1.3184 before dropping off slightly and closing at 1.3141.
- There was no economic data of note yesterday with bank holidays observed in the US, Canada and Japan.
- Overnight we saw NAB business confidence from Australia come in with a figure of 7 whereas we saw a figure of 5 last time out.
- GBP/AUD is currently trading 1.6925, GBP/NZD is trading 1.8643 and GBP/JPY is trading 1.48.20.
- Sterling has pushed back up to yesterdays highs against the USD this morning and has maintained yesterdays closing level.
- At 9.30am we expect to see manufacturing production m/m data from the UK along with goods trade balance data.
- At 1.30pm Canada will release their building permits m/m data which is expected to come in at -0.9%.
- Following that FOMC member Kashkari will be speaking in Minneapolis at 3pm.
|Currency Pair||Interbank Rate||% Change on Day|
|Time (GMT)||Region||Data Release||Forecast||Previous|
|09:30||GBP||Manufacturing Production m/m||0.2%||0.5%|
|09:30||GBP||Goods Trade Balance||-11.4B||-11.6B|
|13:30||CAD||Building Permits m/m||-0.9||-3.5%|
|15:00||USD||FOMC Member Kashkari Speaks|