Since the result of the EU Referendum, it has been nothing but "doom and gloom" for the pound and we have seen nothing but weakness from the currency. We have seen lows of 1.08 against the euro and 1.19 against the dollar.
Fortunately, The pound has found some strength following the US presidential election and we have seen it claw back around 4-5% against most major currencies, making this the best time to sell the pound since the results of the EU Referendum.
I think the question on everyone's mind now has been whether this strength will stick around or not... As we have seen over the last year, the pound has become a currency that is driven predominantly by politics as opposed to economic data. We have also seen this trend with the US dollar, and will now begin to see it more with the euro.
Before the end of 2016, there are still a few events that could be potential market movers for the pound, euro and dollar which I think are important to highlight; The FX Markets are in an extremely volatile state and if you are trading between now and the end of the year there are some factors that you should be aware of;
Autumn Statement 23/11/16 (UK)
Philip Hammond will present the state of the UK economy and government spending plans to the House of Commons. The most important information we are looking for is the UK growth forecast. It is widely expected that this will be cut, as many economists are expecting the UK economy to contract due to Brexit. It is also expected that he will hint at cutting VAT back down to 17.5% but will most probably action this at next year's Budget.
Italian Constitutional Referendum 04/12/16 (EU)
The Italian Prime Minister, Matteo Renzi has presented a vote on a constitutional overhaul that is aimed at producing stronger governments and speeding up the lawmaking process. It is widely expected that if Renzi loses this referendum then it could put Italy's future within the Eurozone at risk. Renzi would most probably step down if he lost and all opposing political parties are all in favour of leaving the euro. If a "No" vote comes in, I would expect to see the euro weaken severely on the back of this.
Supreme Court Decision Re Article 50- 05/12/16 (UK)
The High Court ruling that the UK government will need Parliamentary approval to trigger Article 50 will be appealed to the Supreme Court to see if this can be overturned. British PM Theresa May is still confident that she will trigger Article 50 by March 2017, however, the decision in December could potentially throw a spanner in the works for her if the court sticks with its decision.
Fed Interest Rate Decision 14/12/16 (USA)
It is widely expected that the Fed will look to raise interest rates in December by 25bps, the last rate hike was in December 2015 and the US economy seems to be performing well, the dollar has rallied since the presidential election and this should give it cause to continue. Central Banks are data dependent, so it is important to keep an eye on US economic data, if it is still strong leading up to the decision then a hike should be on the cards.