UK house prices bolster Sterling
Yesterday, Downing Street further suggested that it will be difficult to finalise a deal with the EU before the no-deal deadline at the end of this year, despite this Sterling remains strong.
Tuesday’s data also showed the Nationwide House Price Index hit a new all-time high in August with prices increasing by 2.0% from the previous month. Chief UK economist, Robert Gardner, noted that UK house prices have now reversed the losses recorded in May and June.
The Pound starts the day just above 1.3370 against the Dollar and above 1.1230 against its European counterpart. Focus today turns to BOE Governor Andrew Bailey who will deliver a speech this afternoon.
EUR/USD began yesterday strongly, rising above the 1.20 mark, the highest level since the spring of 2018. The weakness of the Dollar is continuing to drive the currency pair, mainly coming from the Federal Reserve’s dovish tone .
The current stalemate looks set to continue, however White House Chief of Staff Mark Meadows stated yesterday that President Trump would be willing to sign a $1.3 trillion relief bill.
Eyes turn today to US employment data and the currency begins the day just over 1.19 against the Euro.
The Euro rose today after the Eurozone’s inflation figure turned negative last month, increasing the chances that the European Central Bank could inject more stimulus into the market to generate price growth.
Today also saw the release of the Eurozone’s unemployment rate report for July, which rose from 7.7% to 7.9%. As a result, concerns are continuing to grow over the bloc’s unemployment crisis in the months ahead. This has caused the onset of a government scheme to help people back to work to prevent the economy crashing.
Euro investors will be looking ahead to tomorrow’s release of July’s German retail sales figure. Any marked improvement in the Eurozone’s largest economy would prove EUR-positive.
Data To watch
13:15 – USD – ADP Non-Farm Employment Change
14:00 – GBP – BOE Gov Bailey Speaks
15:30 – GBP – MPC Member Boradbent Speaks
15:30 – USD – Crude Oil Inventories