Sterling dips in midweek

Posted 13 June, 2018

The sterling posted weakening against the US dollar in the midweek. The price stands at some 1.3324. This week was full of economic reports and its start was marked by the April industrial production data in the UK. The report showed a 0.8% decline m-o-m, which spoiled investors taking into account the expected increase of 0.1%. At the same time, the March rate slightly rose by 0.1% m-o-m.

According to the released data, the processing sector posted considerable decline (1.4% down m-o-m after 0.1% decline in March). Production in the construction sector was positive and tried to offset the negative results of other segments, but was not strong enough. In particular, the construction sector recorded an upturn of 0.5% m-o-m, though being below expectations anyway. We can say now that UK producers had faced challenges in April, and it is unclear whether the low results were neutralized in May.

At the same time, the next day the market saw the April labour report for April. As the statistics show, the UK still has an unemployment rate of 4.2%, whereas average salary over 3 months ending in April gained 2.5% (2.6% up earlier). This factor also had an influence on the sterling attractiveness.

With another report, this May brought a decline in jobless rates by 7,700, while in April the figures soared by 28,200. The national currency could grab these results, but the recent reports bungled the job. Specifically, the Justice minister Phillip Lee resigned due to contradictions with the government on the Brexit issue.

Previous forecast

13 June, 2018 16:04

← Downward risk dominates in EUR-USD

As the Federal Reserve meeting is coming to an end, the US dollar bulls have calmed down seeing reducing risks. However, the pairs generally change hands at the limited range with the market being focused on the monetary policy. The euro-to-US dollar exchange rate managed to return to the black seeing support at 1.1730 and stays now at some 1.1765.

Downward risk dominates in EUR-USD

Next forecast

11 June, 2018 10:58

CBOE large funds getting ready for bitcoin softening - COT →

The Commodity Futures Trading Commission (CFTC) released the Commitments of Traders (COT) for the week ending last Tuesday. Non-commercial traders raised net short position on bitcoin contracts by 250 to 1,930. Large speculators have been lifting net positions for the second week in a row and four weeks out of the past five. Net short positions had peaked since early February.

CBOE large funds getting ready for bitcoin softening - COT
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