All eyes were on David Cameron last night as he continues to battle in his quest to reach an agreement with the EU in securing a reform. As it currently stands there has been no real progress made with Cameron and the EU having many differing views on proposals to exempt Britain from the future treaty change. This is expected to bring the 28 EU member states ‘’closer’’, something David Cameron is very wary of. As the dark cloud of Brexit looms, the pound could be in for a very volatile few months. We can expect more weakness if Cameron continues to falter at the negotiating table.
The markets were fairly steady on Thursday, with dollar trading mixed against its major counterparts. Lower than expected unemployment claims in the U.S meant that the dollar rallied slightly on the pound however, the overall choppy afternoon session had little direction.
There is very little data to end a volatile week which should see the markets steady heading into the last week of February. This morning we have German PPI and UK retail sales which after the festive clearance sales are expected to rise by around 0.8% in January. We could potentially expect to see strength in the sterling if these figures come in more positive. Later in the day we have core CPI data in the US which measures inflation and will be closely watched by all investors as a rise is on the cards.