An Interesting Twist For The Pound Yesterday

An Interesting Twist For The Pound Yesterday

An Interesting Twist For The Pound Yesterday

Good Morning

An interesting twist for the Pound yesterday, as a QC's Facebook post got traders talking about a High Court ruling over whether the government will be allowed to invoke article 50 without parliamentary approval. Following the speculation from the post that the ruling would be announced today, official confirmation came a few hours later and we're due to hear at 10am today whether the government will get their way or not.

The speculation seemed to lend itself to uncertainty that the government would get it all their own way and Sterling moved higher on the rumor that they won't. Given how short the market is when it comes to the Pound because of Brexit, any delays or legal challenges that get in the way of leaving Europe could be seen as marginally Sterling positive and give the value of the Pound a bit of a boost.

According to Standard and Poors' The Pound is now undervalued by around 15% and is set to remain so for some time. No surprises there, but the interesting point they make is the Pound's no stranger to big moves and since 1975 there have been eight major periods of decline, with an average duration of six months and an average move of 13.8% against the Dollar and 18% against the Euro. CNBC has the in depth take.

We'll stay with Sterling for now, because today's the day where the Bank of England will (probably) sit on their hands. Mark Carney is still confident of another rate cut before year end, but with the data looking so good and inflation expectations so high, he'd be hard pressed to justify his actions. The Bank's inflation report is released this morning and it will be interesting to see if their expectations for inflation next year are as high as the NIESR's prediction of 4%. A forecast in the higher ranges might give Sterling a lift as traders unwind their expectations of future rate cuts.

In the US, the Fed left rates on hold, unsurprisingly, but the case for a hike continues to strengthen, so we'll see what next week brings and whether the rate setting committee will remain on course or be blown horribly adrift by a Trump victory.

Hillary is coming under more fire, this time as Fox News reports that the FBI's investigation into the Clinton Foundation is more far reaching than is being reported and concerns 'pay for play' practices between the foundation and Mrs. Clinton in her capacity as Secretary of State. This is Fox News, so we take everything they say with more than a pinch of salt, but it is the number two news channel in the US, so is bound to have an impact.

There's very little else of note for the time being, so we'll see what today brings and then hope that we have something more interesting to talk about tomorrow! Data wise, it's all about the Bank of England and that inflation forecast (riveting), but also UK service sector numbers will be closely watched as it's the largest part of our economy. The US session brings plenty of tier one data, but is still going to play second fiddle to the election.

Away from the markets, George Osborne handed Theresa May the  'Politician of the year' award at the Spectator Awards last night, which must have been fairly galling given that she sacked him on day one in her job, but apparently it was as well humored as a political bash can be, according to the FT.

Have a great day

©Hamilton Court FX

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email

Recent .

Stock of the Week: Apple in huge demand, beats estimates by billions.

Stock of the Week: Apple in huge demand, beats estimates by billions. Apple beat estimates for quarterly earnings by billions of dollars. We look at …

Read More →
Stock of the week: Facebook makes CEO Mark Zuckerberg $8 billion in just one week!  

Stock of the week: Facebook makes CEO Mark Zuckerberg $8 billion in just one week!   It has been a momentous week for Facebook CEO Mark Zuckerberg who …

Read More →
Big Tech earnings roll in – Huge profits for Google, Microsoft and more! 

Huge profits for Google, Microsoft and more! Major big tech companies have released their quarterly earnings. We look at how some of the world’s biggest businesses performed so far this year!     Google, …

Read More →
MetaTrader 4 vs MetaTrader 5 – which is the better platform?
Bitcoin bounces back: Is buying the dip worth the risk?

Bitcoin bounces back: Is buying the dip worth the risk?  Bitcoin has recovered some of its losses following its fall from a record high of $65,000. Considering the crypto king’s astonishing performance in 2021, should …

Read More →
Oil summit: Waste of time
Oil market outlook: bumpy ride ahead?

2020 has been disastrous for the oil markets, however, it appears that oil has recovered most of its losses and is now hovering near pre-pandemic levels. In today’s article we will take a look at oil’s recent performance and explore the opportunities that may lie ahead.

Read More →
Dollar still on ten month lows while AUD gains
Stock Market Forecast: S&P 500, Dow Jones, NASDAQ Predictions and Analysis for 2021

With 2021 just around the corner, financial analysts are offering their outlook on where the stock market is headed in the coming year — and many of these experts are hoping for a bullish outcome. Read on.

Read More →