Foreign Exchange Daily Market Update 16/04/18

Mon, April 16, 2018

Pound rises and benefit from Geopolitical.

Sterling rose last week as Donald Trump’s tweets along with the March European Central Bank has weakened the dollar and euro. This week, many analyses are saying the pound could continue to benefit from global geopolitical tensions, although U.K. data may pull it in the opposite direction.

Sterling is looking pretty good, although it does have to get through the U.K. earnings and CPI data in the coming week. These are perhaps the most important numbers in the month right now, given the upcoming Bank of England meeting.

The market could see a drop after manufacturing and industrial production figures last week didn’t meet expectation. This main data to look out for this week will be jobs data, inflation and retail sales

If wage growth is less than expected, it’s unlikely to affect the expectation of a May interest-rate hike but halt a second hike in November, this would cause sterling’s recent strength to wobble.

Brexit is also back on the agenda, with the U.K. and EU meeting for the first time to discuss their future trade relationship. With the transition deal agreed last month Brexit is no longer the top agenda, the Irish border is still an issue, which the two sides are due to discuss Wednesday.

The threat of further military intervention in Syria may help sterling after the U.K. authorized air strikes with the U.S. and France over the weekend. Theresa May will address Parliament today about the strikes

The Pound rose to $1.43 this afternoon, against the dollar. It jumped to 1.1562 against the Euro.

Data to look out today.   

13:30 USD Retail sale.

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