It was a very quiet start to the week for the pound with only the latest insight into UK factory growth being released. According to the survey from CBI, optimism in the manufacturing sector has fallen to its lowest level since July 2016. Alongside this and rather unsurprisingly after the weekend’s activities, UK Prime Minister Theresa May reiterated in front of MPS that the country is within ‘touching distance’ of moving on to the next stages of Brexit talks. The Bank of England’s Jon Cunliffe also spoke yesterday, warning that the UK economy has clearly slowed. Following last week’s poor data, Cunliffe certainly has a point, however the market is generally seeing November’s potential interest rate hike as a step out of ‘emergency mode’. However the pound shrugged off Cunliffe’s comments, given his dovish predisposition.
Over in the US, President Donald Trump told reporters that he is ‘very, very close’ to making a decision regarding his Federal Chair nomination. Whilst current Fed member Jerome Powell is seen by many as the best continuity candidate should Yellen not be nominated, there are concerns within the White House that his nomination may not be successful due to the fact that a number of high ranking Republicans voted against him when he was nominated by former President Obama for his current role. That leaves the very hawkish John Taylor. The US Dollar lost some ground late last night as these rumours circulated and whilst the moves were not significant the market definitely has jitters as it tries to discern between hawkish and dovish candidates as well as Trump’s rhetoric.