Weekly Market Report
Brexit talks continued today with Prime Minister Theresa May under pressure on two fronts; European negotiators are pushing her to reveal her hand, while the opposition Labour Party has made a bid to lure May’s critics to their side.
It seems Labour want to stay in the bloc for a further 4 years after Britain leaves the EU to stay part of the single market. The state of economy after the exit has been widely contested over the last few months, but analysts predict a turbulent road ahead after the UK sever ties. It seems that this uncertainty and constant disagreement is only going to condemn the pound even further against its major counterparts; so expect more Sterling woe in the coming weeks and months.
The euro has rallied to its highest since January 2015 as European Central Bank President Mario Draghi took a pass on talking down the common currency in remarks at the Jackson Hole economic symposium, clearing the way for bulls to keep buying. EUR/USD soared to 1.1920, with many experts predicting the year to finish around the 1.22 mark. Those looking to sell USD may want to act sooner rather than later to avoid further swings in the wrong direction…
In contrast the greenback extended Friday’s weakness led by disappointment from the Fed Chair Janet Yellen’s speech at the Jackson Hole Symposium, where she offered little clues over the central bank’s near-term monetary policy path. This has given a small buying opportunity for those looking to purchase USD in the coming weeks.
Key Data Releases – Week Commencing 28/8
Gross domestic Product – USA – USD
Inflation report – UK – GBP
German Unemployment rate – EUR
Consumer Price Index – EU – EUR (Major Data expect volatility)
Non Farm Pay rolls – US – USD (Major Data expect volatility)