Gray Structure

21st August 2020

HOW HAS THE POUND BEEN PERFORMING?

Against the US Dollar

The Pound opened the week against the US Dollar at 1.3100, pushing gradually higher towards the 1.3150 region by Monday close. On Wednesday, the UK released much hotter-than-expected consumer inflation figures which rose +1% in July, which allowed GBP to push to a staggering 9-month high. The pair reached 1.3268 which we haven't seen this level since December. Brexit talks were on going this week, in which "improved talks" are now underway giving GBP that extra boost. On Thursday (yesterday), the US Dollar managed to recoup some losses but this was over turned by sudden negative talks on Brexit. This morning, the Pound shot back up above 1.3200 due to the UK releasing another positive set of Macro data from the economic docket. The UK released it's July retail sales figure of 3.6% which is much higher than the 2% expected.     




 

Against the Euro

This week the Pound opened up against the Euro just above the 1.1050 area with no sense of direction, trading around 1.1020 and 1.1060 region. On Wednesday as mentioned above, the UK released hotter than expected inflation figures allowing the Pound to breakaway towards the 1.1100 region but didn't quite make it. This morning, the Pound hit 1.1160 a near 5 week high due to good retail sales figures.   

Brexit, Covid & Economic Data


- If you have US Dollars or Euros to buy or sell please contact the desk. It's important to try and get the timing right with the Pound being very volatile, our desk can try and support to the best we can.

- On going meetings/negotiations with the UK & EU will fluctuate the Pound.

Please note, this can cause a negative impact for Sterling.

ECONOMIC CALENDAR

Next week​

24th August - 28th August 2020

Monday: 

10:00 CHF ZEW Survey
13:30 US Chicago Fed National Activity

Tuesday:

07:30 EU German GDP
07:30 EU German Business Climate
07:30 EU German IFO Current Assessment
07:30 EU German Expectations
14:00 US Housing Price
14:00 US S&P Case Shiller Home Price
15:00 US New Home Sales
15:00 US Consumer Confidence


Wednesday:

13:30 US Durable Goods Orders
13:30 US Non-defence capital Goods orders

Thursday:
 

108:00 US Jackson Hole Symposium
13:30 US Core Personal Consumption expenditures
13:30 US GDP
13:30 US Initial Jobless Claims 

Friday:

08:00 US Jackson Hole Symposium
10:00 EU Consumer Confidence 
10:00 EU Business Climate 
13:00 EU Hormonized Index of Consumer Prices
13:30 US Core Personal Consumption 
13:30 US Personal Income
13:30 US Personal Spending
 

IN OTHER NEWS

UK government debt hits £2tn for first time

Total UK government debt has exceeded £2 trillion for the first time. At the end of July, debt was £2.004tn, £227.6bn more than at the same point last year, the Office for National Statistics (ONS) said. This is 100.5% of GDP, the first time it has been above 100% since the 1960-61 financial year, the ONS said.

The government borrowed £26.7bn in July, down from a revised £29.5bn in June, as the coronavirus pandemic took its toll on the public finances. The July figure - the difference between spending and tax income - was the fourth highest borrowing in any month since records began in 1993. The three higher figures were the previous three months.

"The £26.7bn the government borrowed in July was the lowest monthly borrowing figure since March as fiscal support started to unwind. Nonetheless, it is another huge sum and pushes borrowing in the year to date to £150.5bn," said Ruth Gregory, senior UK economist at Capital Economics.

 

BBC NEWS

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