Massive Sterling Weakness
In this mornings trading, Sterling fell sharply - and by a big margin.
Since the markets opened at 8am, GBPEUR has fallen from 1.14 to just over 1.10. GBPUSD has falled from 1.4430 to 1.40. Sterling fell against every currency we trade.
Could it be the snow?!
Disruption caused by the heavy snowfall could cost UK businesses more than £1.2bn, business groups have estimated. The Federation of Small Businesses (FSB) said that 20% of the UK’s working population, or 6.4 million people, would not make it to work.
South-east England has the worst snow it has seen for 18 years, causing all London buses to be pulled from service and the closure of Heathrow runways. Trading on the London Stock Exchange was thinner than normal. Stephen Alambritis from the FSB said its estimate was a cautious one and the actual cost was likely to be higher.
“There is also the knock-on effect of passing trade going down as people won’t be buying their sandwiches for lunch or picking up a coffee or newspaper,” he said.
Here at FCD offices, I’m pleased to say all the traders managed to get to the office (eventually!) and we are open for business as usual.
The only economic data of note this morning for the UK actually came in better than expected, but this was not enough to halt the alarming decline of Sterling.
Also, this could be the markets starting to react to an expected interest rate cut this Thursday by the Bank of England.
Data
This afternoon we have various data from the USA. Tomorrow Construction data for the UK, and Producer Price Index data from the Eurozone.
This is a brief summary of todays report. Click here to read the full report on our main website
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