Today's Highlights

  • Sterling jumps a cent on Brexit deal optimism – and Boris said so

  • Euro traders nervous for many reasons

 

Current Market Overview

Sterling regained some of its recent losses right across the board in the last 48 hours in spite of very poor retail sales data. Boris Johnson’s whirlwind whiz around the EU to meet Merkel and Macron specifically have increased expectations that a ‘deal’ can be done before the 31st October deadline. Mr Johnson even said he believes he can get a "good deal" with Brussels, so it must be true. Right now, the interbank level for the pound is pushing $1.22 and €1.10.

Euro traders are nervous; not only do they have the Brexit thing raging on but the Eurozone’s largest economy is contracting, Italy is causing turmoil and the European Central Bank is readying further monetary stimulus. The Euro is vulnerable and risk averse Euro sellers would do well to consider their options.

 

Canadian dollar expected to rise

This morning’s diary is emptier than a political promise but there is data due this afternoon. Canadian retail sales are forecast to show further contraction but perhaps at a slower pace than last month. The Canadian Dollar is likely to react positively if that is the case.

 

Fed Reserve in the spotlight

US manufacturing PMI contracted for the first time in a decade in August. A 49.9 reading is marginally below the ‘no change’ level of 50 but will be cited as a reason why the Federal Reserve needs to ease back on interest rates to allow the market room to grow. I have no doubt the US president will point that out in a tweet sometime soon.

Today’s US data involves new home sales data; a good bellwether of consumer confidence. We will also have a speech from the Chairman of the Federal Reserve, Jerome Powell, who may be able to put some meat on the bones of their interest rate plans.

 

Important meeting this weekend…

And this is a bank holiday weekend for Britain, so the markets will be busy on Monday while Brits bask in glorious sunshine. That is happening whilst the G7 is meeting and Brexit is being discussed; a perfect recipe for volatility. Placing automated orders in the markets to try to take advantage of unexpected volatility is a perfect tool for these situations. Have a word with your Halo Consultant about how that might work in your favour.

Meanwhile, have a fab weekend and let’s catch up again on Tuesday.

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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