In what has been a rather uninteresting week for major currency swings, the headlines have been mostly referencing the start of Brexit negotiations and UK PM Theresa May trying to finalise a "deal" with the DUP (which now looks likely). Meanwhile Scotland's finest, Nicola Sturgeon continues to try and aggravate Theresa by demanding a seat at the Brexit negotiation table (however, one wonders if they provide high-chairs at these types of meetings!) This, despite Sturgeon's pathetic showing north of the border during election time which made Theresa May's performance look positive!
The PM has kicked off the negotiations in Europe by promising to safeguard the 3.5m Europeans currently residing in the UK on the understanding she gets a reciprocal agreement from every other EU country regarding Brits abroad.
Meanwhile, opposition leader Jeremy Corbyn was doing his best impression of the Childcatcher from Chitty Chitty Bang Bang, as he addressed the young masses at the largest music festival in the world....promising free lollipops to anyone who follows him! GBP has been trading in relatively narrow bands as investors await the nitty gritty negotiations to start.
Positive financial data from just about every European country has helped prop the euro up......this despite receiving the wonderfully reassuring news that two Italian banks went to the dogs late Friday night! First of many, we fear.
Over in the States, Teflon Trump seems to be riding the storm created by the Department of Justice after they've got "proof" that Russia interfered with the Presidential election. Obviously this resonates of the good old days when Blair and Bush (aka Mork and Mindy) had "absolute proof" of WMD's in Iraq. Fourteen years later, someone is still trying to find that evidence down the back of the sofa. So, we take it with a pinch of salt regarding the accusations levelled at The Donald. However, uncertainty has suppressed the U.S dollar and it's been pretty stagnant performing against other majors. Markets are pricing in one more rate hike by year-end as the Fed have also stated that the balance sheet amassed during the biggest QE program in history must shrink don't say!
Oil prices are a country mile off the price targets that OPEC would like and have taken considerable hits recently following a lack of demand and a supply glut despite OPEC's promises of production cuts. Obviously questions now abound exactly how effective the cartel's promises can be. We feel there could be more downside to oil, certainly in the short term.
Have yourselves a fantastic week.