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Sterling edges higher before UK budget

currency-newsSterling edges higher before UK budget
The pound closed out last week in a slightly stronger position against most of the majors, and the currency started Monday’s session by creeping higher against currencies like the euro, US dollar and Australian dollar. 

GBP/EUR gained 0.5% to trade in the region of €1.1262, GBP/USD is trending around US$1.3237, GBP/AUD is up 0.3% at AU$1.7500, GBP/NZD is holding around NZ$1.9380, and GBP/CAD has achieved C$1.6900.

Keep scrolling to find out what news you should be looking out for today.

What’s been happening?

The pound benefited from slightly better-than-forecast UK retail sales data towards the end of last week, with the month-on-month increase in consumer spending raising hopes for a brighter fourth quarter.

Sterling managed to retain those gains despite reports that Prime Minister Theresa May is coming under pressure from the cabinet’s Brexit supporters.

May is attempting to reach an agreement with the EU regarding the UK’s so-called divorce bill so trade negotiations can progress, but Brexiter ministers like Boris Johnson are said to be pushing for May to outline exactly what the benefits would be for Britain if the nation pays a higher settlement sum of around £40bn.

On Sunday Chancellor Philip Hammond confirmed that an improved offer would be made to the EU within the next four weeks, so May is on the clock when it comes to getting the cabinet on side.

In other news, the US dollar managed to claw back some of the losses sustained as a result of the announcement that US Special Counsel Robert Mueller had issued a subpoena to several officials from Donald Trump’s 2016 Presidential Campaign.

The euro also managed to stay on firm form despite pessimism from European Central Bank (ECB) President Mario Draghi on the subject of inflation.  

What’s coming up?

There’s no UK data to watch out for today, so GBP/EUR news is more likely to occur as a result of speeches from ECB officials.

The collapse of German coalition talks has already weakened the euro, and President Mario Draghi is set to speak in Brussels this afternoon. Any comments on the inflationary outlook which support the case for the central bank leaving policy accommodative for longer could weaken the euro further. 

Later in the week we’ve got UK public borrowing figures and the autumn budget to contend with.

 In terms of US news, durable goods orders figures, the FOMC meeting minutes and Markit services/manufacturing PMIs are likely to be the biggest market movers.
 
Philip McHugh

Philip McHugh

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)

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