Sterling (GBP, pound) recovered some of the earlier losses that were incurred following the Prime Ministers warning that there was no prospect of Britain keeping “bits” of EU membership. Meanwhile, staying with politics, the head of the London Stock Exchange (LSE) has suggested to MPs that the government should negotiate a five year Brexit deal. It is believed that the extended transitional period would enable more safeguarding of the financial sector.
The market will be focused on the manufacturing production number today. The sector could be the silver lining for a weak currency. After the shock decline last reading the number is expected to bounce back and post a growth number of 0.6 percent. We shouldn’t get too carried away with this reading, however, as manufacturing makes up just 15-20 percent of the nation’s Gross Domestic Product (GDP). In addition, the trade balance is also due to be released; any political development could potentially causes turbulence in the currency market.