With a mostly quiet week of headlines and data from the U.K., Sterling was a slave, like most of the other major currencies, to geopolitical developments and global risk sentiment.
United Kingdom Headlines and Economic data
Monday:
- IHS Markit / CIPS UK Services PMI: Business activity growth edges up to a nine-month high
- We can collapse your government to prevent no-deal Brexit, senior Conservative MP warns Boris Johnson
Tuesday:
- BRC Retail Sales: Pent-up demand released in July
- Somewhat uniform moves in Sterling pairs as geopolitical updates had global risk sentiment on a roller coaster ride during the Asia trading session. First, a downward move in risk in reaction to the U.S. officially labeling China as a currency manipulator. The turn around later came when the PBOC made moves to limit the weakness in the yuan.
Wednesday:
Thursday:
- UK PM Johnson to hold election soon after Brexit if lawmakers sink government: FT
- UK must leave EU on Oct. 31, PM Johnson says when asked about prospect of resigning
- It’s up to EU to avoid no-deal Brexit, says UK foreign minister
- British PM Johnson urges lawmakers to back October 31 Brexit
- We saw the above refreshed round of tensions between the U.K. and EU on Brexit on the session, which is likely why we saw a broad move lower in pound pairs.
Friday:
- UK economy shrinks for first time since 2012. Brexit could tip it into recession
- U.K. Construction output decreased by 1.3% in Apr to June 2019
- U.K. services output increased by 0.1% in Apr to June 2019 compared growth of 0.4% in Q1
- Friday’s set of economic updates were a big downer for the British pound as the weakness pre-Brexit isn’t encouraging for what we may see if Brexit actually happens. Sterling bears strongly take control, especially after broad risk sentiment turns more negative during the U.S. trading session on headlines that the US government won’t do business with Huawei and is not ready to make a trade deal with China.
