Will Sterling rebound in the medium term?
Today's Economic Calendar
- 9:30 - UK Construction PMI
There seems to be growing confidence from many economists that the Pound could significantly rise against the Euro and US Dollars. This on the basis that Theresa May pushes ahead with a soft-Brexit.
The call comes at the start of a busy week in terms of the UK's Brexit journey with Monday bringing with it news for a 'third way' for a future trading relationship being proposed by the UK government, while the week will be book-ended by a critical meeting of the Cabinet to push for an unified stance on what the future relationship will look like. The details of the new 'third way' will not be revealed until after the meeting of the Cabinet at the Prime Minister's country retreat, known as Chequers, and the coming week will therefore be prone to speculation over the matter.
For Sterling, there will be little by way of hard information to trade off, and the malaise the currency has suffered over recent weeks, primarily against the US Dollar, and more recently against the Euro too, will therefore likely extend until more I known about the Brexit plan.
Today we have a light day on the data front, with the release of the UK’s Construction PMI the only reading of note. The second PMI of the weak, accounts for the smallest section of the UK Economy, the construction sector. The construction sector has been pretty stable in a state of small expansion, with two posts above the 50 point mark, both at 52.5, in the last two months. A slight increase to 52.6 is expected today.
Remy Malvy - FX Dealer