A Long Week for the British Pound (Weekly Review)

2018-12-18
The past week was full of important events that were able to revive the foreign exchange market, in particular currency pairs with the GBP and EUR. The main event of the week can be called a voting scheduled for Tuesday in the UK Parliament on implementation of the Brexit deal with the EU, and prior to the voting the British pound was sold out because market participants were expecting rather a negative outcome than a positive one.

The news that the British Prime Minister Theresa May intended to request the parliament to postpone the voting, hoping to get concessions from Brussels on some issues, caused a fresh wave of sales. Following the consent of the parliament to postpone the voting, the news came about the vote of confidence to the prime minister, which she successfully passed. However, the EU refuses to make any concessions, which keeps the risks of a “tough” Brexit, along with the GBP remaining in a vulnerable position in case of no further positive news.

The single European currency is in a similar position. French President Emmanuel Macron was forced to make a number of concessions to the protesters in matters of social policy, which may lead to an increase in the budget deficit, which, in turn, gives the Italian authorities a weighty argument in disputes with Brussels on the draft budget. In addition, even though the ECB announced winding down current incentives, the outlook for the commencement of monetary tightening remains very vague, and amid all these factors, the euro may continue to be under pressure, and its growth attempts will be limited.

Schedule for this week:

Monday, December 17
10:00 GMT – Eurozone. Consumer Price Index (CPI);
10:00 GMT – Eurozone. Core Consumer Price Index (CPI);

13:30 GMT – USA. NY Empire State Manufacturing Index.

Tuesday, December 18
00:00 GMT – Australia. New Home Sales;
00:30 GMT - Australia. Reserve Bank of Australia Meeting Minutes;
09:00 GMT – Germany. IFO Current Assessment;
09:00 GMT - Germany. IFO Business Climate Index;
09:00 GMT - Germany. IFO Business Expectations;
13:30 GMT – USA. Housing Starts;
13:30 GMT - USA. Building Permitsр.

Wednesday, December 19
22:00 GMT – New Zealand. Westpac Consumer Sentiment Index;
23:50 GMT – Japan. Trade Balance;
23:50 GMT - Japan. Imports/Exports;
09:30 GMT – United Kingdom. Consumer Price Index (CPI);
09:30 GMT - United Kingdom. Core Consumer Price Index (CPI);

13:30 GMT - Canada. Bank of Canada Core Consumer Price Index (CPI);
13:30 GMT – Canada. Consumer Price Index (CPI);
19:00 GMT – USA. Fed Interest Rate Decision;
19:00 GMT - USA. Federal Open Market Committee (FOMC) Economic Projections;
19:00 GMT - USA. Federal Open Market Committee (FOMC) Monetary Policy Statement;
19:30 GMT - USA. Federal Open Market Committee (FOMC) Press Conference.


Thursday, December 20
22:45 GMT - New Zealand. Trade Balance;
22:45 GMT - New Zealand. Imports/Exports;
22:45 GMT - New Zealand. GDP (QoQ) (Q3);
00:30 GMT – Australia. Unemployment Rate;
00:30 GMT - Australia. Participation Rate;
02:00 GMT – Japan. Bank of Japan Interest Rate Decision;
02:00 GMT - Japan. Bank of Japan Press Conference and Monetary Policy Statement;
04:00 GMT - Japan. Bank of Japan Press Conference;

09:30 GMT - United Kingdom. Retail Sales;
12:00 GMT - United Kingdom. Bank of England Interest Rate Decision;
12:00 GMT - United Kingdom. Bank of England Meeting Minutes;

13:30 GMT – USA. Initial Jobless Claims.

Friday, December 21
23:30 GMT – Japan. National Consumer Price Index (CPI);
09:30 GMT - United Kingdom. Public Sector Net Borrowing;
13:30 GMT – Canada. GDP (MoM) (Oct);
13:30 GMT - USA. Durable Goods Orders (Nov);
13:30 GMT - USA. GDP YoY;

15:00 GMT - USA. Core Personal Consumption Expenditure (PCE) Price Index ;
19:30 GMT - USA. Fed Chair Jerome Powell Testifies.

Author: Anthony Porter, IAFT Analyst

Back


loaded:ok