The pound performed well yesterday and, after a brief pause for breath earlier in the week, continued to gain ground across the board. By the end of the day’s trading the currency was up 0.3% against the dollar and 0.7% against the euro. A lack of economic data releases failed to provide the currency with much support. However, continued positive Brexit sentiment combined with positive comments from BoE member Michael Saunders boosted the pound.
Saunders commented that British unemployment is likely to fall further than the BoE and most other economists expect this year, pushing pay growth to near its fastest rate since the financial crisis.
Once again, a lack of economic data releases could leave the pound exposed today. However, with investor sentiment at recent highs, the pound may show resilience against wider market pressure.
The single currency struggled yesterday, losing an average of 0.65% across the board after a lack of economic data releases meant the euro had little support. Dovish comments from ECB member Nowotny weighed on the currency after he told reporters the euro's recent strength against the dollar is "not helpful", which encouraged a bout of profit-taking before a policy meeting next week.
Once again, a lack of economic data releases is likely to leave the single currency exposed to wider market pressures.
The dollar posted a mixed performance yesterday, losing 0.3% against the pound but gaining 0.6% against the struggling euro. A positive NY manufacturing number provided the currency with initial support. However, positive comments from the UK saw the greenback struggle against the pound.
The dollar index has risen slightly this morning after US Treasury yields rose over two percent. This saw some investors move back into the dollar. However, general consensus still remained cautious of the dollar for the long term.
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