Good morning,

As the dust settles on sterling’s violent crash back down to earth post-election, the markets can look towards some more familiar signs away from the political arena, to gauge how the pound will perform as we approach the end of the year. Firstly, retail sales numbers for November are released at 9.30; usually at this time of year, the British consumer, regardless of market conditions, boosts the economy through Black Friday and Cyber Monday spending sprees – another this year could give some help to the beleaguered pound in the short run.

More importantly, however, is the Bank of England interest rate decision due out at 12.00 today. Whilst the occasion has been marred by scandal; with top hedge funds allegedly paying between £2,500-£5,000 for an audio feed of its meetings to gain a competitive advantage, the market sentiment remains of the belief that GBP rates will remain unchanged. As always, if the meeting minutes released point to the contrary regarding 2020’s plans post-Carney, expect the pound to respond accordingly.

Across the Atlantic, Donald Trump became the third US President to be impeached by the House of Representatives. Although he is very unlikely to be removed from office by being impeached in the Senate, where a two-thirds majority needed, it is still a historic moment which would normally spell the end to a president’s career. However, Trump is no ordinary president and there is sentiment to suggest the partisan nature of the impeachment proceedings will be spun to his ‘them against us’ style which has defined his first term. The dollar, for the time being, is far more interested in the developments around phase two of the trade negotiations with China; any inclination that these may come pre-election will likely give the dollar a lift.

Have a great day,

Author: Josh Haden-Jones, Senior Relationship Manager

 

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