The GBP/EUR rate today moved up and down touching on 1.14, before dropping to 1.13 finally finishing the day in between the two. This morning there was not particularly positive Average Earning data however there was positive claimant count change coming in over 2,000 better than expected.
Following the tragic fire in the Grenfell tower block in London the talks between Theresa May and the DUP were put on hold. This raised concerns that the Queens Speech may also be delayed and potentially the start of the EU Brexit talks. Considering the comments from the EU’s chief negotiator Michel Barnier suggesting time is running out as there has already been 3 months wasted since Theresa May triggered Article 50. If the negotiations don’t start soon the 2 year window is in danger of being reached without a deal being negotiated, creating even further uncertainty, there’s a fair argument the market is already considering this to be a real outcome.
Another Busy Day tomorrow
The Bank of England will provide their latest interest rate decision tomorrow and the market believes nothing will change. Mark Carney will provide a speech tomorrow and answers questions from the press which will provide an insight into the thoughts of the 9 person committee. Previously 8 members have voted against any changes with 1 voting for, however with inflation on the rise it could cause further members to vote towards an interest rate hike. Any signs of a hike on the cards and there could well be a positive movement for Sterling tomorrow. It would certainly come as a welcome relief with the summer holidays around the corner providing a potential opportunity for purchasing holiday currency.