GBP: Cross-party talks unable to shift sentiment
UK politics, as a whole, remains utterly useless this week with Labour continuing to take pot shots at the Conservatives and Theresa May; why should they work to bridge a plan when the Prime Minister is on the way out and her successor might not honour the deal?
Cross-party talks haven’t resulted in any real progress, and it’s worth remembering that the markets take a negative view on a Corbyn led country and economy. This is now playing its part in driving down the pound and squeezing out any optimism.
There is no economic data today, or tomorrow, meaning the pound will be left to drift between ranges. GBP/EUR is now down 3% from the beginning of May and GBP/USD is down 2.6%.
USD: Trade tensions continue to grip markets
Today at 13:30 BST we get a look into Housing Starts and Building Permits. Following on from yesterday’s disappointing retail reading for Q2, the markets will be looking for a positive improvement following improved domestic mortgage rates. The Philadelphia Manufacturing Survey is also released at 13:00 BST.
There are rumours that Trump’s proposed US car tariff decision will be postponed for six months, but there has been no executive order issued. With the overnight technology ban applied to Huawei and their affiliates, which effectively bans them from selling in the United States, this remains a very risky time to be involved in the dollar. More now than ever, a currency strategy is required to ensure that your exposure is limited.