All eyes on UK data as sterling languishes at lows…
It’s the last day of what’s already been an exceptionally volatile week of trade. From stocks having their worst day (Monday) since February 2018 to the US dollar/Chinese yuan pair break above 7 for the first time in over 11 years, it’s certainly been an interesting week of trade. So much for the usual quiet uneventful Summer trading conditions!
Today is all about the UK and the health of the economy in the 2nd quarter of 2019. This morning sees a raft of releases all scheduled to cross the wires at 0930. First and foremost, UK Q2 preliminary GDP is due to show zero growth in the economy in the months of April to July. In addition to this, we’ll also see industrial and manufacturing production numbers for July as well as trade balance figures.
The pound is currently finding it hard to make friends in the world of currency with the GBPEUR making fresh multi-year lows in the €1.07s yesterday. The importance of today’s UK data releases could not be more overstated. Any downside surprises to UK GDP (essentially meaning the UK contracted in Q2) would be taken very badly by the market and would likely spur another round of selling. Please remember – hope is not a strategy. If you’re exposed to the pound over the next few months please consider mitigating the potential risk of further downside.
Written by Viv Savani. 8:27am, August 9th 2019
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