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Weekly roundup: Pound takes another hit from poor data

currency-newsWeekly roundup: Pound takes another hit from poor data
The results of the French Presidential Election somewhat unsettled the pound due to the implications for the upcoming Brexit negotiations. Emmanuel Macron had previously referred to Brexit as a ‘crime’, suggesting that his leadership of France may make the country adverse to the UK’s aims of achieving a special relationship with the EU following its divorce from the project.

Thursday’s slew of poor economic data kept the pound on the decline until the weekend. Industrial, manufacturing, construction and trade data for March all performed significantly worse-than-forecast. The National Institute for Economic and Social Research (NIESR) released their estimate for April’s GDP, expecting to see just 0.2% growth at the beginning of the second quarter; half the rate expected.

Additionally, the latest batch of developments from the Bank of England (BoE) weakened demand for the pound as well. It was supposed to be a ‘Super Thursday’, thanks to the release of the UK’s inflation report alongside the announcement of monetary policy decisions. However, Governor Mark Carney suggested that it was possible for interest rates to go lower if needed and intimated that the BoE still needed to ignore strong inflation in order to focus on the health of the wider economy.

Tuesday’s consumer price figures and Wednesday’s wage growth statistics will help gauge the outlook on the economy. While the pound could get a boost from stronger inflation, on the hope that it might prompt the BoE to rethink its cautious attitude towards raising interest rates, if Wednesday’s wage growth figures remain sluggish the outlook for consumer spending could weaken, undermining GBP.
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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