Sterling’s anxieties were on full display this Wednesday, the currency weighed down by Mark Carney’s economic warnings, no-deal Brexit fears and a so far dire week for UK data.
The pound shed another 0.4% against the dollar, meaning cable has almost completely unwound the gains seen in the back half of June. Now the currency is stuck at a 2-week low of $1.256, and only a smidge above its recent 5 and a half month nadir. Against the euro, meanwhile, a 0.2% dip pushed the pound to €1.1145, meaning it is effectively lurking at a 6-month low.
The morning’s services PMI is meant to hold at 51.0, which could help stabilise sterling. However, both the manufacturing and construction readings drastically undershot expectations to sink further into contraction territory this week, so the currency can be forgiven for perhaps being a bit nervous ahead of the release.
With the pound in the dog house, the FTSE was allowed to continue its early July climb. The index added another 25 points after the bell, enough to lift it above 7590 for the first time since the end of August last year. The Eurozone indices were similarly perky: the DAX was up 0.3%, with the CAC once again nearing 5600 as it rose 0.2%.
Sainsbury's (LON:SBRY) – which at this point is struggling to break £2 and is down nearly a quarter in 2019 thanks to the Asda deal-collapse – avoided another round of losses on Wednesday despite posting a 1.6% decline in first quarter like-for-likes. That’s an acceleration from the 0.9% slide seen in Q4, and near the top end of analysts’ pre-release forecasts of a 1.1% to 2% decline.
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