What’s been happening? The pound ended the day on strong form overall yesterday, even though there was a lack of domestic data to provide additional tailwinds for Sterling. The recent solid, if disappointing, PMIs were helping to soften fears over the impact of Brexit upon the UK economy, weakening the influence of one of GBP’s major downside risks. Meanwhile, Prime Minister Theresa May reshuffled her cabinet, but the major political players Boris Johnson, David Davis, and Philip Hammond all remained in their current roles. This removed some of the uncertainty surrounding the government’s approach going forwards, and also avoided any potentially politically damaging clashes, in particular with Johnson, who is seen as a strong rival for the role of prime minister. GBP/EUR gains were heightened thanks to a slump from the euro, with markets continuing to express disappointment over Friday’s more sluggish than expected core CPI reading for the Eurozone. Strong confidence and retail sales figures for the currency bloc failed to provide the uplift needed for the euro to resist the pound’s advance; German factory orders posted a surprise decline month-on-month, further adding to investor gloom. GBP/USD was stuck around opening levels, as the US dollar was strengthened by hawkish comments made by Federal Reserve official John Williams over the weekend. Williams suggested that the median market expectations for three interest rate hikes this year are accurate, as well as forecasting strong GDP and a fall of several basis points for the unemployment rate over the coming year. | 
