Morning Update – Road to recovery

Since Brexit has been swept under the carpet it appears the UK is making a slight recovery now fundamentals have picked up…

GBP

Continued good news from the UK has allowed us to really find a level here and plug the descent we’ve been witnessing. Consumer price inflation nudged up to 2.5 percent year on year in July from 2.4 percent the previous month, in line with a Reuters poll of analysts. The rise is the first time inflation has picked up in 2018, fingers crossed household wages follow suit so the general public don’t feel the pinch in the coming months. Retail sales slightly missed expectations, however that doesn’t appear to have impacted confidence within the market.

EUR

Friday we are set to see the EUR release their consumer price inflation figures. Any miss here, compiled with the ongoing Turkish saga, expect to see EUR weaken to levels we’ve been comfortable with. For fear of expressing a bias opinion, 1FX believes the EUR is far too strong at current levels. Once Brexit has blown over, fundamentals will have to shine through. The Italian bank situation needs to be addressed, Greece still has no money and Germany aren’t manufacturing to the same level as anticipated. Definitely set to be travelling in the other direction to GBP long term.

USD

US retail sales are taking centre stage this afternoon with an anticipated good reading compounding the run we’ve been witnessing of late. In addition to a good reading this afternoon, investors are still classing USD as a safe haven in light of the Turkish debacle. Really is the flavour of the month!

As always any questions ask away. Have a good day!

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