Pound slides ahead of GDP release (Weds 9:30)
GBPUSD falls below 1.25; EURGBP near 0.90
Ocado rallies despite losses due to fire
There’s been some fresh weakness seen in the pound with the currency trading at levels not seen since the beginning of the year against the US dollar, while the GBP/EUR rate is also near to 6-months lows. These lows against the buck were seen during the flash crash overnight on the 2nd January and if that spike down is excluded then you have to go back to April 2017 to find a lower exchange rate. Stock markets across Europe are trading lower and London is no exception with the FTSE 100 in the red and down by 25 points at the time of writing.
The pound has fallen to a 6-month low against the US dollar and if we exclude the flash crash (caused by a surging JPY overnight on 2nd January) then you have to go all the way back to April 2017 to find lower levels for this pair. Source: xStation
There’s not really any major new catalysts for this depreciation with it likely due to ongoing softening in economic data with tomorrow’s release of Q2 GDP expected to show the first quarterly decline in 7 years. Ongoing subdued activity in the global economy is taking its toll while the continued political uncertainty is providing a pretty persistent headwind to higher levels of growth. The raised diplomatic tensions between the US and UK after the recent email leaks is certainly not helping matters, and could also be playing its part in this latest leg lower with President Trump typically hostile in his social media response.
Ocado shares rise despite £100M fire hit
The best performing blue-chip today is Ocado, with shares in the online delivery firm gaining more than 5% after reporting its latest set of results. A huge fire at the Andover warehouse is said to have cost over £100M and the blaze knocked 2% off the firm’s sales in the first half of the year, with a loss of £142.8M reported over the 6-month period. However, once this one-off event is accounted for the outlook seems to be growing increasingly favourable for the company despite posting another loss, with deals with M&S, Coles of Australia and Sobeys in Canada all representing areas for significant potential growth opportunities. The stock rose above £12.50 to hit a 7-week high not long after trading began this morning and investors will be hopeful that the share price can recoup more of the declines seen since the blaze, with the market falling almost 20% last quarter in a move that was largely due to the fire.
Shares in Ocado have jumped by more than 5% after the latest trading update - despite a sizable loss. The stock is now attempting to move back above the 50 SMA with a daily high seen around 12.60. Source: xStation