IFX Market Report
Monday 2nd October 2017

Market Report

The pound fell on Friday as growth figures released in the morning failed to meet expectations.

GDP figures for the 2nd quarter on an annualised basis fell to 1.5% from 1.7% in the 1st Quarter. Experts had expected the Q2 figures to match Q1 but a slowdown in household expenditure helped drag growth down.

GBPUSD fell from a high of 1.3423 to a morning low of 1.3359, as US data came out in the afternoon the pound rose to close the week at 1.3401.

GBPEUR opened at 1.1391 and quickly fell to the low of day 1.1319, after choppy trading in the afternoon the pound managed to recover a little and then went on to close at 1.1351.

Worldwide News

In Germany unemployment fell to the lowest level since West and East Germany became a unified single country in 1990. The number of applicants claiming for unemployment fell by 23k in Sep, bringing the overall unemployment rate down to 5.6% versus an estimate of 5.7%.

Inflation in the Eurozone remained at 1.5% in September following 1.5% in August. Analysts had expected a small rise to 1.6% this month. Core Inflation which includes Food and Energy fell to 1.1% from 1.2% last month. The ECB have mentioned low inflation is one of their concerns about tightening monetary policy, so this result may have pushed back their plans.

In the US, Core Personal Consumption Expenditure failed to meet targets of 0.2%, coming in at 0.1%. On an annualised a basis, it fell to 1.3% versus a 1.4% estimate and 1.4% last month.

On Friday EURUSD gradually tracked up, reversing some of the declines seen earlier in the week. The pair traded at 1.1773 just before the London markets opened and hit a high of 1.1829 around lunchtime going on to close at 1.1803.

Over the weekend the political unrest in Barcelona has seen the euro reverse Friday’s gains, currently EURUSD is trading at 1.1740.