As with the phrase what goes up must come down, we have seen a recent sell off in US technology equities, after over inflated prices buoyed the market due to Fed Reserve stimulus. Among the biggest losers of the day were Apple, Microsoft and Tesla. GBP is closely linked to global equities and risk appetite, and with the stock sell off, sterling tumbled too. Losing nearly 0.8% against the euro and 0.9% against the US dollar, before recording gains in the Friday open in Europe. Fingers point in the direction of German factory orders released this morning, for the slight rebound. Despite the release showing there was the expected uplift in orders, the data came in below expectations.
A Reuters poll, released early this morning, predicts sterling losing ground against the US dollar. With both Brexit uncertainties mounting and Covid fears still lingering globally, the analysts quizzed see it hard for sterling to hold the recent gains. With the hopes of a trade deal still to be agreed on, come the final window of opportunity in October, forecast pricing ranges wildly on both the positive and the negative sides. It makes one wonder if the train is leaving the platform, taking recent gains along with it.
A light day of data is ahead to finish the week, with the two noteworthy releases will come after UK lunch time. US non-farm payrolls will show the number of new jobs created nationwide, with analysts always highlighting this as a key metric to the health of the economy. At the same time Canada releases their unemployment rate for August.
If you are looking to secure any position before what could be a volatile day, please reach out to your relationship manager to see how we can best navigate the trading session.
Have a great day.
Author: Jack Nicholls, Relationship Manager
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