Sterling continues to slump as Parliamentary vote looms…
The pound continued its brutal run yesterday with the currency breaking through a couple of strong short-term support levels against key peers. The UK retail sales report in the morning did nothing to help sterling’s cause with the number printing a lot weaker than forecast. Following this, the lunchtime announcement from the Bank of England created a small spike to the upside which was immediately used as a selling opportunity. The Bank had 2 members of the Monetary Policy Committee vote to lower rates imminently while forward guidance remained consistent. Essentially, even considering the developments on Brexit it’s still too early to define how this will impact the UK economy. As a result, the Bank stated it will remain cautious. The pound traded lower into the European afternoon session, breaking below $1.30 and €1.17 against the buck and euro before mildly bouncing back into the New York close.
Today sees PM Johnson’s Withdrawal Agreement Bill voted on in Parliament. The bill will cruise through after 365 Tory MPs have confirmed they will back it. This means the bill will be passed across to the House of Lords where it will be voted on in January.
On the data front today, 2 key GDP reports will be released from the UK and US. In addition, there’ll be a raft of regional eurozone numbers on tap ranging from consumer sentiment to trade balance data. Canada are scheduled for a retail sales report too.
Have a good weekend.
Written by Viv Savani. 8:30am, December 20th 2019
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8:34am, January 9th 2020
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