Sterling Ends Week Up

Cable broke 1.3200 on Friday for the first time since 03 August as the dollar remained under pressure and the pound received support from above-forecast Manufacturing Production data. Sterling’s gains bring into focus the year-to-date high of 1.3272. Sterling also made headway against the euro, reclaiming 1.0900.

Previous Day's Market Highlights

Cable broke 1.3200 on Friday for the first time since 03 August as the dollar remained under pressure and the pound received support from above-forecast Manufacturing Production data. Sterling’s gains bring into focus the year-to-date high of 1.3272. Sterling also made headway against the euro, reclaiming 1.0900.
 
Sterling’s rally saw it regain 1.6000 against the Canadian dollar for the first time since Wednesday’s Bank of Canada rate hike took some investors by surprise. Although Canada’s employment data surprised to the upside, the loonie was unable to regain the upper hand against the pound.
 
The Fed’s Harker spoke but did not address monetary policy.
 
Other highlights from last week included euro-dollar hitting a new high since January 2015 after the ECB signalled that a decision on tapering would come this autumn. Sterling-euro held well clear of year-to-date lows of 1.0745. 

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.0982 1.1043 1.0745 2.70%
GBP / USD 1.3188 1.3225 1.2777 3.39%
EUR / USD 1.2008 1.2093 1.1662 3.56%
GBP/AUD 1.6407 1.6554 1.6165 2.35%
GBP / NZD 1.8185 1.8253 1.7522 4.00%
GBP / CAD 1.5999 1.6519 1.5837 4.13%

Today's Market Highlights

The week kicks off with a quiet economic calendar today but is set to be a volatile one for the pound, which regained 1.3200 against the dollar and 1.0900 against the euro last week. The House of Commons continues to debate and then votes on the EU Withdrawal Bill today.
 
On Tuesday, the UK releases its latest inflation figures. A re-acceleration in CPI could offer the pound support as it may bring back into focus the question of the degree to which the Bank will tolerate inflation overshooting its target rate.
 
Wednesday sees the latest employment data. Given the negative impact of rising inflation on real wages, investors will keep a close eye on whether wage growth picked up in July.
 
The Bank of England is expected to keep interest rates on hold when it announces its latest policy decision on Thursday. 


Investors will continue to evaluate the economic implications of the destruction wrought by Hurricanes Harvey and Irma.

Today's Economic Calendar

Time Currency Release Consensus Previous
13:15 CAD Housing Starts s.a. YoY (Aug) 216.0K 222.3K
02:30 AUD National Australia Bank's Business Confidence (Aug) 12