By Matthew Vassallo
The Pound’s upturn during the early morning trading hours yesterday was ultimately short-lived, as it failed to gain the necessary support to reinforce even the modest improvement we saw.
GBP initially gained momentum following the S&P/CIPS Construction PMI data which came in above market expectation at 45.6. However, as we’ve seen over recent months the Pound has struggled to sustain any substantial upturns, and this was once again the running theme yesterday. This fragile support for GBP seemed to waver following an underwhelming address by the Band of England’s (BoE) Chief Economist and Executive Director for Monetary Analysis and Research Huw Pill, in which there was little optimism expressed that we were likely to see any major economic recovery for the UK economy in the short-term. Whilst GBP trading levels remain slightly higher against both the EUR & USD than they were at the close of last week’s trading, it would seem that the recent change of seasons and darker evenings have dampened spirits, with the recent more bullish economic forecasts being replaced by a far more stagnant outlook.
Looking ahead and we currently have BoE governor Andrew Bailey speech, in which he will likely reiterate his dovish stance from last week’s minutes following the centrals banks latest decision to keep UK interest rates on hold. Beyond this there are the latest Eurozone Retail Sales figures released at 10am this morning and a speech this afternoon by the Chairman of the US Federal Reserve Jerome Powell. Both could potentially impact investors risk appetite and ultimately cause a shift in the market rates, ahead of what is a quieter end to the trading week from an economic data perspective.