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Signs that the UK government was knuckling down and formulating its plans for Brexit helped push the pound higher yesterday.
GBP/EUR is trading in the region of €1.1333, GBP/USD is fluctuating around US$1.3391, GBP/AUD is holding steady at AU$1.7416, GBP/NZD is on the cusp of NZ$1.9101, and GBP/CAD is in the region of C$1.7219.
For once, a news story involving Theresa May and the Cabinet gave Sterling a boost. Read on to find out why…
What’s been happening?
The pound was pushed higher yesterday thanks to a combination of positive UK industry data and hopes for progress from the government regarding Brexit.
Order book volumes hit a 30-year high for UK manufacturers, according to data released by the Confederation of British Industry (CBI), showing that the weakness in Sterling was having a positive impact on demand for UK producers.
Additionally, Prime Minister Theresa May met her Cabinet to discuss plans for the next stage of Brexit negotiations; the first time the government has actually held talks on the type of Brexit it is aiming for.
Hoping for some more clarity regarding the government’s aims and the likely shape of the final Brexit arrangement, markets bought into Sterling.
GBP/EUR was also supported by the news that inflation in the Eurozone remained significantly below the European Central Bank’s (ECB) target levels of 2.0%.
Month-on-month and year-on-year overall inflation was in line with earlier estimates.
Meanwhile, GBP/USD was able to surge thanks to a lack of US data to provide support for the US dollar.
The strength of the pound and the euro further sapped appetite for USD, as did the wait for more news regarding President Donald Trump’s plans for tax reform.
What’s coming up?
There is no UK data set for release today, but it’s highly likely that there will be some kind of development, commentary or rumour regarding the Brexit process to unsettle the pound.
The euro will have the latest German Ifo business climate and expectations surveys to contend with, as well as Eurozone construction output data and labour costs figures.
As long as there is no word on tax reform markets will have to be content with the latest housing starts and building permits figures, which could give a window into the health of the US economy and consumer confidence.
We’re here to talk currency whenever you need us, so get in touch if you want to know more about the latest news or how it could impact your currency transfers.
