020 7898 0500Friday was yet another topsy-turvy day for the pound as there is currently little risk appetite. Reuters published details of comments made by Barnier, which seemed to be positive for the future of Brexit negotiations and the pound pushed through the $1.30 barrier for the first time in a week.
However, as the day progressed, positive jobs data from the US helped the dollar retrace most of its earlier losses. That said, the pound did hold on to most of its gains against the euro. More clarity on Brexit and trade wars is required before we can reasonably expect any major currency moves. It is simply too much of a risk at the moment to put all eggs in one basket – which perhaps best explains why we keep seeing a move in one direction before it pulls back in the other direction.
The week starts off in extremely busy fashion for UK economic data, with the headline release being July’s balance of trade figures. We will also see construction output, and manufacturing and industrial production figures. Tomorrow we have the unemployment rate and average earnings and the Bank of England’s interest rate decision on Thursday. Rates will not be increased this time around but it will be interesting to see what policymakers say about future policy.
