British Sport out performs the British Pound – 11th July 2016

British Sport out performs the British Pound

British sport certainly had a much better weekend than the British Pound with messrs Froome, Murray and Hamilton recording magnificent victories while Sterling just about broke even against the other dozen most actively-traded currencies.

Although Sterling lost out to the Antipodean Dollars and the South African Rand it was higher against the other major currencies, strengthening by an average of 0.1%, an eighth of a US cent. Its achievement was not exactly the stuff of legend but for Sterling the moment any win, however narrow, is to be savoured as at least it prooved Sterling can actually go up.

Whilst it would be an exaggeration to say Sterling was helped by the UK economic data on Thursday and Friday, at least it was not hurt by their mediocrity. Manufacturing and industrial output both fell by -0.5% in May, beating forecasts that they would be down by -1%. Britain’s trade deficit for the same month, -£9.9bn, was not as bad as expected.

The strong 287,000 increase in US nonfarm payrolls on Friday was just as much of a surprise as the previous month’s weak and downwardly-revised 11,000 rise. The two numbers just about cancelled out one another, leaving the average for the last three months at 147,000, somewhat below the 213,000 average last year. The payrolls number provided some reassurance that the US economy is still growing but was not seen as strong enough to provoke a rate hike by the Federal Reserve.

A sparsely-populated agenda contains nothing of major importance to the FX market today with more heavyweight data due later in the week including the Bank of England and Bank of Canada interest rate meetings.