Previous Day's Market Highlights
Sterling once again rallied on positive comments from Chief EU negotiator Michel Barnier, who said that it is “realistic” and “possible” to get a Brexit deal in the next six to eight weeks at a conference in Slovenia. The pound gained over 0.5% against the euro and 0.7% against the dollar, hitting one-month highs. Sterling broke 1.99 against the kiwi dollar for the first time since the EU Referendum in June 2016. The pound traded at one-month highs against the Canadian dollar and at around four-month highs against the Australian dollar.
On the data front, UK manufacturing production slowed more than expected on both a monthly and annualised basis. On the other hand, trade balance and monthly GDP data surprised to the upside. GDP rose to 0.3% in July from 0.1% in June. Overall, the data had a muted impact on the pound.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
The pound has largely held onto yesterday’s gains, particularly against a softer dollar. Sterling-dollar has been trading in the upper half of the 1.30-1.31 band this morning, while sterling-euro has inched a touch lower but is still trading above 1.12. Euro-dollar has moved higher above 1.16. Sterling-kiwi has tested 2.00 for the first time in over two years.
Following on from yesterday’s production data, the pound will keep an eye on the UK’s latest employment data (09:30 BST). A pick-up in wage growth alongside a lower Claimant Count Change and 4% Unemployment Rate could see the pound strengthen. If the wage growth figures disappoint, the pound could instead weaken. Markets will continue to keep an eye out for any new Brexit headlines. While recent comments have been positive, there are still risks ahead, including the need for parliamentary approval of any deal.
Today's Economic Calendar
|9:30am||GBP||Claimant Count Change (Aug||3.6K||6.2K|
|9:30am||GBP||ILO Unemployment Rate 3M (Jul)||4%||4%|
|9:30am||GBP||Average Earnings Including Bonus 3M/Yr (Jul)||2.5%||2.4%|
|9:30am||GBP||Average Earnings Excluding Bonus 3M/Yr (Jul)||2.8%||2.7%|
|10:00am||EUR||German ZEW Economic Sentiment (Sep)||-13.5||-13.7|
|10:00am||EUR||Eurozone ZEW Economic Sentiment (Sep)||-10.9||-11.1|
|1:15pm||CAD||Housing Starts s.a. YoY (Aug)||217.5K||206.3K|
|1:30am||AUD||Westpac Consumer Confidence (Sep)||-2.3%|