The Sterling is being driven by different fundamentals over the past week. UK data and political situation. UK data released this last few days beat market’s expectations, but was overall worrisome, as employment posted the biggest drop in over two years, while retail sales fell yearly basis for the first time since 2013, clearly reflecting concerns over the post-Brexit economic future. On Brexit negotiations, another week went through with no progress. EU authorities don’t believe sufficient progress will be made by December to move to the next phase, while UK PM May hopes the contrary. A final version of UK Q3 GDP will be released this week.
I have been writing about the importance of the 1.31800, and you may be getting bored to hear this level. However, Cable needs to stay above 1.31800 to continue its upward movement.
As I wrote in my EURUSD analysis: “Markets decided to go nowhere”