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Sterling drops at month end as parliamentary vote approaches

Published: Friday 29 March 2019

  • German unemployment is best since reunification
  • Canadian economy expected to restart growth

By David Johnson

Another day; another vote in parliament on Brexit and another round of vultures circling over Theresa May’s premiership. Sterling has dropped a cent since yesterday, as this is officially the last day of Britain’s membership of the EU unless a deal can be done, a vote can be won and a delay can be agreed. I think I speak for the whole nation when I say, JUST GET ON WITH IT!

With all the politicking it is easy to forget this is also the last working day of the month and the quarter, so traders will be squaring up some of their open trading positions and that, too, may have contributed to the Pound’s correction. It has spent most of March increasing in value.

Today’s UK data started with an upbeat Nationwide House Price index and includes the Q4 economic growth figure which should be confirmed at 1.3%. Unless the Gross Domestic Product (GDP) number is markedly different to that, the Pound will be at the mercy of fickle MPs and no one deserves that.

German employment up but Euro no stronger
This morning brought an improvement in German employment with the unemployment rate falling to 4.9%, the lowest since the reunification of East and West Germany. We will also see a smattering of Eurozone inflation data and a couple of speeches from European Central Bank (ECB) people. None of this has, or is likely to strengthen the Euro. The caveat to that is anything completely unexpected coming from the speakers.

Canadian economy could get good news today
This afternoon delivers what should be a return to growth in the Canadian economy after a couple of months of contraction. The Canadian Dollar may well strengthen on that.

US housing market data important for the Dollar
US data today is thin but the housing market data is perhaps the most influential on the US Dollar. However, aside from the data releases, The US and China are being very civil, sitting down for a social engagement prior to the commencement of the next round of trade talks. US trade negotiators and the Treasury Secretary are in Beijing for the talks. It will be a protracted affair, I suspect, and no news is expected straightaway.

Friday means Friday
I hope your Friday is a good one and, just remember that, one day we will look back on this Brexit affair and laugh. What do you mean, ‘I am already’?

The game
A young boy enters a barber’s shop and the barber whispers to his customer, “This is the dumbest kid in the world. Watch while I prove it to you.”
The barber puts a Five Pound Note in one hand and two One Pound Coins in the other, then calls the boy over and asks, “Which do you want, son?” The boy takes the two coins and leaves.
“What did I tell you?” said the barber. “That boy never learns!”
Later, when the customer leaves, he sees the same young boy coming out of the sweet shop across the road.
“Hey,” he says. “Can I ask you a question? Why did you take the coins instead of the Five Pound Note?”
The boy popped a sweet into his mouth and replied: “Because the day I take the fiver, the game is over!”

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