Weekly Market Report 25/09/17


Sterling suffered sharp losses against both USD and EUR last week after Theresa May delivered her Brexit speech from Florence. In the build-up to the PMs speech markets began to predict bad news for the Pound as it slipped against major currencies following reports of a huge 20-Billion-pound divorce bill and reports of negotiations stalling. During her speech, she said the UK will honour its financial commitments to the EU and is seeking a 2-year transition period. She also reiterated the government’s stance that the UK will be leaving the single market and customs union but didn’t mention the 20 billion divorce bill which has been reported in the press. Sterling fluctuated during May’s speech but ended the day 0.7c lower against the EUR and 0.4c lower against the Dollar as markets were left unimpressed her the PMs efforts.


It was a strong week for the Euro as confidence picked up in response to the latest Eurozone PMIs. Markets were encouraged as the data was much better than expected. German manufacturing sector performed particularly strongly with an uptake from 59.3 to 60.6. The domestic outlook for the single currency zone is much more optimistic following these reports prompting hopes that the European Central Bank could be encouraged to take a more hawkish view in the future.


US dollar climbed last week following the Federal Reserve policy meeting last meet. The bank announced it would begin to reduce the 4.5 Trillion-dollar balance sheet that it has accrued since the 2008 financial crisis. It also hinted at a possible interest rate towards the end of the year. Markets now price a rate hike in December at over 70% following last week’s meeting.

Week ahead:

Monday: ECB President Draghi Speech (EUR)

Bank of Japan Monetary Policy minutes (JPY)

Tuesday: Federal Reserve President Janet Yellen Speech (USD)

Wednesday: Bank of Canada Poloz Speech (CAD)

RBZN Rate statement and interest rate decision (NZD)

Thursday: Bank of England Mark Carney’s speech (GBP)

Friday: EUR Consumer price index (EUR)

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