GBP
Sterling was unable to make progress on Friday with limited domestic economic developments and the Irish PM Varadkar stating that he was not convinced that there had been sufficient progress on Brexit, and a sharp decline in oil prices didn’t help. The Pound was held below the 1.3300 mark against a firm Dollar and the Euro resisted further losses.
Markets remained sceptical that the Bank of England would increase interest rates in August, and rhetoric in this week’s meeting will be scrutinised for any hints. Former MPC member and known hawk, Andrew Sentance seemed exasperated by stagnant interest rates, commenting “I don’t think having people who aren’t familiar with the UK economy jetted in would be a good thing.”
Sterling opened close to 1.1450 against the Euro, and 1.3240 versus the Dollar.
EUR
The Bundesbank cut the 2018 German GDP growth estimate to 2.0% from 2.5%, although the 2019 estimate was increased and the inflation projection for this year was also pushed slightly higher. European Central Bank (ECB) rhetoric was a little more hawkish as some members looked to inject more confidence surrounding the outlook. Nowotny stated that the inflation goal of close to 2.0% had been achieved, but Euro sentiment remained weak.
Euro rallies quickly attracted selling interest and it edged below 1.1600 against the Dollar in the early hours of Monday as the latter continuing to gain support from expectations of a hawkishFed stance. |
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