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A volatile month for currencies lies ahead – be prepared

Published: Monday 11 June 2018

  • Sterling suffers from Brexit disagreement
  • Euro boosted on Italy-EU confirmation
  • US and global markets await Federal Reserve decision
​​By Charlie Horsley

June is likely to continue to be a particularly eventful month for currency markets, as we are expecting a hike in US interest rates by the Federal Reserve, a European Central Bank policy meeting and a Brexit Bill vote. All these key announcements pose risks for currency traders and could inject more volatility in the currency markets – you have been warned…

Sterling suffers from Brexit disagreement

Sterling suffered from more Brexit uncertainty on Friday, when the EU’s Brexit negotiator responded to the UK’s proposal for avoiding Ireland border issues "raises more questions than answers”, saying there is still much to negotiate. This saw the British Pound slide against both the US Dollar and the Euro, as investors focused on the remaining differences between the EU and Britain and further hurdles ahead in agreeing the terms of the EU-UK relationship after the UK leaves the bloc. This Sterling weakness comes ahead of a week in which a crucial Brexit vote in the British parliament and important economic data may determine if the Pound can snap its two-month losing streak.

Today in the UK, we have production and trade figures, but the markets’ eyes will already be turning to the US Federal Reserve meeting on Wednesday – where it is anticipated that they will increase interest rates again – and the European Central Bank’s (ECB) meeting later this week, where talk will revolve around the ECB’s monetary stimulus programme.

Euro boosted on Italy-EU confirmation

The Euro bounced as Italian Economy Minister Tria ruled out the idea of the Italians leaving the single market. The markets have generally shrugged of the G7/Trump chaos. Investors will now be focusing on the European Central Bank’s decision on the €30 billion asset purchase programme on Thursday this week.

US and global markets await Federal Reserve decision

World markets will be watching the forthcoming Federal Reserve meeting with anticipation, as it is expected that the US will up their interest rates once more. This could provide support for the US Dollar against all its key currency pairings, so is a significant announcement to look out for.


UK top for tech

The UK has received some reassuring news about its future as a global business leader. The UK has been awarded the accolade of Europe’s tech leader in today’s news – very timely at the start of #LondonTechWeek.

UK is overseas investment leader

A new survey by EY also reports that, Brexit or not, the UK remains top in Europe for foreign direct investment, above European powerhouses, Germany and France. London leads the way for foreign investment, followed by Scotland and North West England which have seen significant growth; the Midlands and the South East, which has also upped its game over the past year. Yorkshire and Humber region has seen a big boost from the previous year and follows closely behind Southern England in the number of internationally funded projects secured. Here’s hoping all this good news will help support the Pound at some point…
School run

Early one morning, a mother went in to wake up her son. 
"Wake up, son. It's time to go to school!" 
"But why, Mom? I don't want to go." 
"Give me two reasons why you don't want to go." 
"Well, the kids hate me for one, and the teachers hate me also!" 
"Oh, that's no reason not to go to school. Come on now and get ready." 
"Give me two reasons why I should go to school." 
"Well, for one, you're 52 years old. And for another, you're the Head Master!"

Today's Major Economic Releases

Market BST Data/Event Previous Expected
GBP 09:30 UK: Manufacturing Production -0.1% 0.3%
GBP 09:30 UK: Goods Trade Balance -12.3b -11.5b
GBP 09:30 UK: Construction Output -2.3% 2.4%
GBP 09:30 UK: Industrial Production 0.1% 0.1%

For more information, infographics and the latest currency insights, visit www.halofinancial.com/news