Employment data and average Earnings gives the Pound a boost
Yesterday provided some much needed positive data for the UK. Things were looking very bleak following recent inflation, retail and GDP data. GDP landed at 0.1% the worst figures for five years. A rate hike from the Bank of England (BOE) was no longer justified and investors lost faith in the pound with the chance of a rate hike in 2018 looking like a long shot.
Employment data was released yesterday and proved to be impressive, average wage growth slightly slowed, but this can be interpreted as positive due to it now falling below inflation. Things are looking slightly healthier.
Euro buyers should take note with GBP/EUR now sat at 1.1420.
Brexit white paper could provide some clarity on Brexit stance
Theresa May and Chief Brexit negotiator David Davis have stated they will issue a white paper in June detailing how the cabinet intends to resolve the customs union situation and the governments intentions for the Britain’s relationship with the EU in the future. Any form of clarity on Brexit will usually boost the pound, if there is one thing the markets do not react well to , it is uncertainty.
When to move?
GBP/EUR – I have stated that Euro sellers should take advantage of the 1.13s, if the host of poor data and the chances of a rate hike from the BOE slashed did not cause GBP/EUR to fall into the 1.12s it is going to take some pretty bad news to do so.
Euro buyers if you have to move short term things are looking far more attractive. Be wary of hoping for 1.15 +. Every time 1.15 has been breached the market quickly retracts demonstrating the fragility of the pound.
GBP/USD – There is a clear opportunity for USD sellers who have recently had a 10 cent movement in their favour. I would be trading if I was sitting on USD on not hanging on for further gains.
GBP/AUD -Considering the interest rate outlook from the Reserve Bank of Australia (RBA) and the risk of the tariffs effecting Chinese growth, AUD sellers should also think about moving considering GBP/AUD was very close to breaching 1.85 recently. GBP/AUD currently at 1.80.
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