Daily Update - 13th February 2018
On literally a no data day, Euro strengthened against the dollar on Monday. The selloff across asset classes forced investors betting against the US Currency to unwind their positions. The dollar also benefited as nervous investors bought the relative safety US Assets. Buying the Euro was one of the popular trades earlier this year on the view that European Central Bank will scaled back its stimulus later this year on the back of a strong recovery in the euro zone economy. Sterling edged lower against the greenback as sterling was weighed down by uncertainty among investors over whether Britain would succeed in securing a post-Brexit transition period. Despite uncertainties around Brexit, the pound has been propped up by rising expectations the Bank of England will raise interest rates to curb inflation. An important day for the Pound as key figures will be released, related to UK inflation, Retail Price index, CPI and PPI. After the BOE turned hawkish, market expectations for a rate hike in May 2018 have risen quite substantially. However, a lot depends on the inflation which is keeping up at the moment. The data might bring some relief to the economy, but won't back the case for a faster pace in rate hikes, which coupled with Brexit jitters, could end up weighing on Pound. The day will end with a speech from FOMC member Mester.Yesterday’s market
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