(MENAFN- Daily Forex)
The pound sterling benefited from the optimism that took over the market regarding the post-Brexit talks. EU Brexit Negotiator, Michel Barnier said that a deal with the UK government is within reach, while a new round of negotiations were announced. On Sunday, the Bank of England's Governor, Andrew Bailey made a reference to the possibility of setting negative cash rates, though according to his comments the bank would only be willing to do so when the UK experiences an economic upturn. “Our assessment of negative interest rates, from the experience elsewhere, is that they probably appear to work better in a more wholesale financial market context, and probably better in a nascent economic upturn,”
he said. On Monday, the Bank of England's Deputy Governor, Jon Cunliffe said that British hedge funds that rely on borrowed money to fund their financial activities should be scrutinized, given that they are a potential threat to financial stability. On Wednesday the bank published the Consumer Price Index, which stood at 0.4 percent in September (month-to-month), after dropping 0.4 percent in the previous month and below the analysts' expectations, who foresaw it to be at 0.5 percent. In yearly terms, the index stood at 0.5 percent, higher than the previous month's 0.2 percent and remaining in line with the analysts' expectations. The Retail Price Index went up by 1.1 percent, below the analysts' expectations who foresaw it to be at 1.2 percent and higher than the previous month's 0.5 percent. The Producer Prices Index Core Output went up by 0.3 percent, after being at 0 percent in the previous month and over the analysts' expectations, who foresaw it to be at 0.1 percent.On Thursday, the Confederation of British Industry released the Industrial Trends Survey for October, which showed an improvement from September's -48 percent, at -34 percent and way better than the analysts' expectations, who foresaw it to be at -45 percent. Consumer confidence dropped to -31 in October, after being at -25 in September and worse than the analysts' expectations, who foresaw it to be a -28.The Bank of England's
Chief Economist, Andy Haldane said during a conference at the National Institute of Economic and Social Research that the UK's household spending is remarkably resilient, pointing out the US case and claiming that the UK could follow the same path. On Friday, the Office for National Statistics published that Retail Sales went up by 4.7
percent, after climbing by 2.7 percent in August and way better than the analysts' forecasts, who expected it to rise by 3.7 percent. In monthly terms, retail sales went up by 1.5 percent, after being at 0.9 percent in the previous month, and higher than the analysts' expectations, who foresaw it to be at 0.4 percent. IHS Markit reported that the preliminary Manufacturing PMI for October stood at 53.3, signaling a slower expansion of the sector compared to September's, which stood at 54.1, and better the analysts' expectations, who foresaw it to be at 53.1. The services PMI was at 52.3, below the analyst's expectations, and showing a slower expansion of the sector, as the previous month's figure stood at 54.
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