020 7898 0500The pound sterling has had a tough week in general. Even though UK consumer confidence rose in December for the first time in three months, consumers are still concerned about higher inflation and Brexit, hence the continued loss for sterling. The pound has had four straight days of losses and is at five-week lows against the dollar. During the past six months since the EU referendum, sterling has been less sensitive to data and driven more by the news around Brexit. Any signs the Brexit will be hard results in sterling losing ground whilst rumours of a soft exit helping to strengthen the pound. Traders expect this trend to continue. The first quarter of 2017 will hopefully see more clarity on the UK negotiation approach as Theresa May informs the UK of her Brexit Plan and triggers Article 50 before the end of March. A number of traders believe that the pound is stronger than it should be, that the market isn’t pricing in sufficiently the strong possibility of a hard Brexit.
Today sees the last set of figures before the Christmas break. We have the third revision of the third quarter (Q3) Gross Domestic Product (GDP) figures plus the business investment figure released today. We may see exaggerated movement due to lower than usual liquidity in the market especially as most companies start closing down at lunch time. The coming week could be used as an opportunity to place orders into the market in case we do see some exaggerated currency movement and there is a one off opportunity to benefit. May be worth a chat with your trader.
