For those of you trading Sterling, you would know that since Easter, we have seen a downtrend on the Pound against all majors, but mainly against the Euro. We are currently trading between 1.1120-1.1166, and it seems that the downtrend will continue down to 1.10 before we see any meaningful bounce on the market- unless we get more bad news for the UK. Many major banks have said 1.08 is a realistic target, however, I would like to see how our political situation in the UK plays out first.

This week, the main releases for the Uk are services, manufacturing and construction PMI, which essentially gauge the level of activity in certain major sectors, and are a reliable forward indicator for economists.

Manufacturing PMI is usually targetted to be above the 50 area, which is the threshold, this month we are expecting to see a reading of 49.5, which is higher than last months, but still lower than the threshold, which may weaken the Pound. Services PMI is expected to remain the same and Construction is expected to come out higher than last month.

Over this next week, I am not expecting anything politically related to affect the markets, the final vote will take place Mid July, with the new PM being named July 23. It seems that Boris Johnson is still favourite to win and I believe this has now been priced into the markets.

If you are dealing with any upcoming transactions and would like further analysis please don’t hesitate to contact me to tailor a solution for you.