Global Themes

Currencies once again at the mercy of politicians 

  • GBP loses steam as date set for Article 50
  • Macron takes lead in race for French Presidency after first television debate
  • GBP surges higher as inflation beats market expectations

GBP

GBP loses steam as Wednesday 29 March set as the date the UK will officially file for divorce from the EU.

After carrying the positive momentum from last week into the beginning of this week, the pound was dealt a blow with the announcement that Article 50 would be triggered before the end of this month. Although the sell-off was limited to around 1 cent, this shows that the market is still nervous with regards to any news regarding the formal beginning of negotiations. Next week EU council President Donald Tusk will provide the draft Brexit guidelines within 48 hours of Article 50 being triggered. Effectively this will outline how the EU plans to proceed with negotiations. 

French Election

Macron takes lead in race for French Presidency after first television debate
EUR has strengthened as Emmanual Macron was viewed as winning the debate according to 29% of viewers (Elabe pollster)

Macron came out victorious with anti-EU candidate Marine Le Pen losing ground. Le Pen attempted to play on the nationalist policies which have been popular around the globe in recent times proposing to ban all immigration and impose a 35 percent tariff on certain imported goods. Macron responded with criticism of this divisive attitude towards immigrants, highlighting that Le Pen has a lack of ethics and experience outside of politics. The next televised debate is scheduled for April 4. 

UK CPI

GBP Surges higher as inflation beats market expectations. UK CPI numbers released this morning showed an annual growth in prices of 2.3%, beating the market consensus of 2.1%.

For the first time in more than three years the CPI has pushed above the Bank of England’s target of 2%. This will put pressure on the bank to hike rates to keep inflation under control and as a result the Pound has responded immediately by jumping higher. CPI is the highest since September 2013 with transport costs in particular fuel prices the main contributor. Food prices increased by 0.3% between February and March following 31 consecutive months of prices falling on the year. 


Western Union Business Solutions has based the opinions expressed herein on information generally available to the public. Western Union Business Solutions makes no warranty concerning the accuracy of this information and specifically disclaims any liability whatsoever for any loss arising from trading decisions based on the opinions expressed and information contained herein. Such information and opinions are for general information only and are not intended to present advice with respect to matters reviewed and commented upon.

Deliver the Daily Currency Market Analysis to my Inbox

Published five days a week, this newsletter provides day-to-day trends and activities affecting the market in easy-to-understand snapshots.