G20 Meeting Kicks off, Referendum Still Pushes the Pound Lower
GBP/USD is currently trading at about 1.3920, GBP/EUR is trading at about 1.2630 as the market opens up this morning (London Session). The #Sterling once again lower (fresh near 7-year lows against the U.S. dollar and a 14-month low against the #Euro) as we the market opens up this morning.
To be honest the news, the blaster around the referendum have started to slip away through the overnight session and actually if you take a look at the polling data that we’ve started to see come of ICM and Yougov and folks like that, and you look at the phone polling data as opposed to the #polls that have been done online, it shows that the “Remain camp” still have a rather sizeable lead (anyway between 12pts-15pts).
Why are we looking at phone polling data? Well, phone polling data was a little bit more accurate compared to the online surveys throughout the general election and the Scottish referendum. It also has fewer undecided within the results and therefore it may show just where undecided are starting to come down as afar as their #voting preference.
Obviously, that’s a positive for the Sterling you’ll have to say in the short term. #Economic data from the United Kingdom has also been positive, but Sterling once again is in the crosshairs. I’m not insinuating that we’ve made a bottom in GBP/USD, but certainly the data is showing that we may be ready for a bounce back some time soon.
Elsewhere, the #G20 meeting (the meeting for the richest 20 countries in the word) starts in #Shanghai today. We’ve seen the #IMF warning that fiscal policies need to be expiatory as well as monetary policy. We’ve heard from central bankers in Sweden, in Denmark, that low interest rates (negative interest rates) simply aren’t working, therefore fiscal policies may have to change to try and drive growth.
Furthermore, we’ve been saying a lot about changing fiscal policies throughout the course of the European financial crisis. The #European Central Bank couldn’t do with the heavy lifting and that austerity tightening and fiscal policy was disruptive to growth and wasn’t helping anyone move forward.
As it stands at the moment, the U.S. dollar still is very much in focus. The greenback is stronger against #emerging market currencies, stronger against the Euro and stronger against the Sterling obviously. We’ll find out about initial #jobless claims numbers at 13:30 BST today. It would be interesting to see whether the hiring that we saw in the services sector through Q4 and the early part of Q1 have continued.
We’ll also get UK GDP at 09:30 BST, we are expecting a little revision lower, 0.4 versus 0.5, but as it stands at the moment, the only thing that people are worried about for the Pound is #Brexit.