A renewed sense of political anxiety gripped the pound ahead of the weekend as the Conservative leadership contest came down to its final two candidates.
- Pound faces further weakness a cross-party talks stall
- Will euro strength continue into today?
- New Zealand consumers set to support NZD
Sterling set to be driven by Brexit volatility in light day for UK data
The pound has seen significant losses so far this week, and that trend looks set to continue today unless there are any positive surprises with the cross-party Brexit talks.
It is a very light day for UK data today, so markets will instead likely be focused on political developments. If the cross-party Brexit negotiations appear to be in an unbreakable deadlock then we could see the pound continue to tumble for the rest of the week.
Signs of continuing euro strength following Draghi speech
Yesterday’s better-than-expected German industrial production data will have given euro traders some relief if it points to an uptick in confidence in the Eurozone’s powerhouse economy.
As a result, the euro was on a strong footing for the greater part of the day, although that could change today if sentiment wanes as there is almost no fresh economic data slated for release.
Instead traders could still be pondering the speech made by ECB President Mario Draghi to students yesterday in which he defended the ECB’s inflation goal, saying that the bank’s targets would be helped along by higher wage growth.
Draghi avoided being overly dovish in his comments, allowing the euro to trend higher on speculation that there will not be any major changes to ECB monetary policy in the immediate future.
Will New Zealand consumers support NZD tonight?
Later on we will get to find out whether New Zealand consumers have started spending again following March’s -0.3% contraction revealed in the electronic card retail sales report.
Current indications are that there was a 0.8% increase in spending in April, and if this turns out to be the case it should help bolster NZD which has lately been battered by a global risk-off movement.
Thursday, 9th May 2019
13:30 USD Producer Price Index, Trade Balance & Jobless Claims
13:30 USD Federal Reserve Chair Powell Speech
23:45 NZD Electronic Card Sales (April)
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)