By Simon Eastman
Tuesday was a pretty quiet day for market data so traders had little of key importance to go on through the day. With sterling on the back foot of late, having lots multiple percentage points to various currencies, it was little surprise that the Pound started to slump yet again.
The only key release was from Canada with its merchandise trade figure which came out better than forecast, but the gains were minimal for the Loonie. Other than that it was central banker speeches that ruled the day, most notably from Jerome Powell late afternoon.
Powell talked about a strong jobs report and how inflation declines would continue throughout the year, but did mention the US was “just at the beginning of its deflation period”, and hinted that further interest rate rises would be needed to help get to that 2 percent target. As a result we saw the dollar march on against the euro, and taking nearly a cent off sterling by close of UK trade. The Fed also cooled any views of interest rate cuts happening this year, adding to the dollar’s strength. The only saving grace for sterling-euro, was the stronger dollar led to a weaker euro, which saw the earlier losses on GBP-EUR reversed by close of play.
Still the Pound is clearly struggling with a lack of any positive data and concerns over growth so those with sterling in hand may be prudent to speak to one of the team today to look at the possible strategies available to maximise returns.
Wednesday is even quieter than yesterday on the data releases, with just a couple of US Fed member speeches.
As we close, we take a moment to think of the ongoing situation in Turkey and Syria following the earthquake. Thinking of all those who have lost their lives, and the families who have been affected, a number which is sadly increasing each day. Such a devastating tragedy, which will be felt for a long time to come.