Weekly Market Report – 26/02/2018

Weekly Market Report 26/02/2018

Last week we saw Sterling weaken as Britain’s unemployment level unexpectedly rose by 4.4% for the first time in 2 years. The Bank of England governor Mark Carney spoke with a hawkish tone regarding the monetary policy. The expected rate hike in May still has a strong probability of happening, which suggests it is already priced into the Pounds value. This week Theresa May is set to meet her cabinet on Tuesday to discuss the Conservative’s position on Brexit. A united party should help the value of the pound.

The Euro has been the best performing currency already this year. Mario Draghi the President of the Central Bank has highlighted the Euro’s strength as a worry. Exports from the EU have decreased due to the increasing price of the Euro. The UK and the European Union will be discussing phase 2 of the Brexit negotiations, nothing has been formally decided as yet so we could be in for a very volatile period ahead.

The US Dollar gained off the back of weak data such as the UK unemployment data. The Fed are still planning to hike rates a further three times before the end of the year. Inflation in the US is also expected to rise up to the Fed’s target of 2% by the end of next year, this is likely to result in Greenback strength.

Upcoming Data:

Mon – EUR – ECB President Draghi’s Speech

Tues – EUR – Harmonised Index of Consumer Prices (Ger)
USD – Fed’s Powell Speech

Weds – EUR – Consumer Price Index
USD – Gross Domestic Product

Fri – GBP – UK Prime Minister Theresa May Speech
GBP – BOE’s Governor Carney Speech

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