Sterling had some reasons to be cheerful in the week gone by. Retail sales data was better than expected, and last week’s brief Brexit negotiations did little to move the pound, either up or down, but it wasn’t down! We do however remain tightly range bound and there is a chance that a break out of this range could send the pound lower.
The reasons why Sterling might suffer are clear, there’s little appetite in it and the uncertainty of the Brexit journey is enough to hurt the market longer term let alone for the here and now.
News from both the UK and Europe was light this week, and other than the retail sales figure, there’s been little to excite the market.
Whispers of unrest in Westminster continue, however, and this story looks like it will develop into a further headache for Mrs. May. A winter of discontent in the cards? Almost certainly.
For those of you that need to cover your obligations in the short-term then be happy that we’re seeing rates above €1.10, you might need over €1.12 but the risk of it going lower in the short to medium term is real so protect yourselves and watch the (likely) mess unfold.
By Luke Trevail, senior currency-trader.