UK: Pound Ground Down - Investec
Research Team at Investec, notes that after a quiet bank holiday, yesterday began with fairly muted market activity as Sterling continued to trade in tight ranges against the Euro and Dollar.
“As we moved into the afternoon, activity picked up after data showed that US consumer spending jumped by 1% in April, rebounding from disappointing data in March that was likely affected by an early Easter. Whilst data also showed consumer confidence dipped from the previous month, it did little to shake belief that the Federal Reserve will raise rates at some point this summer. This was quickly followed by results of a UK ICM poll that showed Vote Leave edge ahead of Vote Remain, which was in firm contrast to polling data over the past month which has shown an increasing lead for ‘remain’. Sterling quickly went into tailspin, giving up its gains over the past week, as it fell by over a cent against the Dollar and Euro. Sterling opens this morning back below 1.45 and 1.30.
Meanwhile, the Nationwide House price survey showed house price growth continued to cool in May, after slowing in April. However the perceived slowdown in activity could be due to the rush to push through purchases ahead of the stamp duty changes that took effect on 1 April.”