Following weak CPI inflation data this morning, Sterling faced an almost unrelenting headwind. Losing a value of almost 0.5% in the first 30 minutes of European trading against the Euro, the Pound found little footing from rumours seeping out of Brussels. Weak CPI data came as a surprise to traders and investors who had, only yesterday, awarded the Pound with considerable value on the back of promising wage data purporting the highest levels of wage growth since the financial crisis. Succumbing to Brexit scaremongering and uncertain economics, the Pound retreated having threatened 1.32 once again at market open. The Pound and Euro both grabbed a bid earlier this week as festering rumours of the EU’s willingness to extend the transition period into 2021 gained further credibility. A smooth Brexit that works on both sides of the Channel/North Sea is collectively better for intra-European trade, supporting both the Euro and Pound. The Dollar has gained strength today, producing a retracement on the chronic Dollar weakness that has plagued the greenback so far this week.
Discussion and Analysis by Charles Porter
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