- Economic data continues to shine despite Brexit
- Consumer confidence signals positive spending
- Housing prices continue to boom
- GBPEUR peaked at 1.18
Economic data continues to defy Brexit gloom
The Brexit doom continues to be challenged as we head into September, consumer confidence is taking a rebound since the Brexit vote signalling an upsurge in consumer spending. Alongside this, concerns over a housing crisis have equally been laid to rest, with Halifax signalling a boom in housing prices this month.
Whilst this news is positive, I must echo what I’ve previously written in reports. This data is still premature given that Article 50 has not yet been evoked, with a date in Q1 of 2017 likely for this to happen.
Will the Pound improve?
I am of the opinion at this stage that Sterling has room for further movements, whilst it is unlikely we will see levels prior to Referendum in the coming months, GBPEUR exchange rates could hit 1.20 before Article 50 is invoked and the UK begin its withdrawal from the EU. There are however, some important economic events coming up in the weeks ahead that could weaken Sterling.
US FED rate raise could weaken Sterling?
Janet Yellen of the FED announced on Friday that if economic data continued its positive momentum a FED hike could be on the table very soon. Many have interpreted this as early as September, whilst I remain sceptical at this stage, a FED hike could see Sterling fall yet again.
Friday’s unemployment rate and non-farm releases for the US could be what the FED need to pull the stings on an Interest rate raise. This could be significant for the US Dollar, given its status as a safe-haven currency investors could pull out from the Pound and move their funds into the US Dollar.
If you are looking to buy foreign currency in the near future, keep an eye on the US releases on Friday, this could be a strong indicator for the FED to increase rates in the coming weeks.