Sentiment Improves after May Vote Disaster – 16 January 2019

While lower currently, the Pound Sterling remains close to a 2-month peak as FX traders await the a no-confidence vote against Theresa May and her government. Just the day before, the Prime Minister’s Brexit proposal was soundly defeated in a Parliamentary vote, giving rise to hopes that some sort of compromise will now be sought for the upcoming Brexit. Even Mark Carney, the Governor of the Bank of England, chimed in with his thoughts, saying that the Pound’s rise was because traders believed the process would likely be extended or that the threat of a no-deal was now off the table.

As reported at 11:35 am (GMT) in London, the GBP/USD was trading at $1.2846, down 0.16% and moving off the session peak of $1.2896. The EUR/GBP was trading at 0.8864 Pence, a gain of 0.03%; the pair has ranged in today’s session from 0.88432 Pence to 0.88893 Pence.

Data Sounds Pound Lower

The Pound is currently coming under what is likely to be short-term pressure from the latest economic data which shows that the Producer Price Index Output fell in November (month-over-month) to -0.3%, against analysts’ forecasts of a slight decline to 0.0% from 0.1% the previous month. The Retail Price Index also suffered a slide, 0.4% and 2.7% (month-over-month and year-over-year), on the former, missing the 0.5% which had been predicted, and in the latter case, falling beyond the 2.9% decline anticipated.

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