Just when the market is getting over the political uncertainty, and the news about the minority government struggling to keep control of their side of the Commons wains, the market decides to listen to fundamental figures and reacts accordingly.Post Brexit most data releases have been largely ignored. Today, however, on the back of Halifax’s June housing data showing the average house price dropped by 1% the pound has reacted negatively. Manufacturing factory output data also showed an unexpected fall, and economists think the two reports have pushed back further any chance of an interest hike by the Bank of England.
The trend in the markets has been largely downwards in the weeks following the UK election and, with more bad news coming its way, the prospect of things changing in favour of the pound seem slim. Those of you that needing to buy foreign currency with pounds should consider acting sooner rather than later.
The Eurozone, on the other hand, is resilient and strong. Of course, there’s always the cliff edge to fall off but on the whole it’s stable for now. The German elections coming up will help drive uncertainty and volatility, but the cracks that were starting to appear seem have been filled in for now.
All of this before any significant steps have been taken on the Brexit negotiations path, which, of course, is treacherous, but could provide some comfort if things go the way of the UK.
More updates to follow, but if you need to move your money a trade above €1.10 seems like a good prospect.
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