By Lauren Buckner
Very little has changed in currency markets through this week so far as the market continues to look for direction.
Sterling remains in a sideways trend versus both the Euro and the US Dollar as very little in terms of economic data has been released through the past two days. A small flurry downwards for Sterling yesterday afternoon can perhaps be attributed to the Labour Party conference and the focus that Starmer’s speech placed on the current government’s failings. But no real movement of note as the Pound continues to move less than a cent against the majors per day.
Looking forward to the second half of the week and there are some releases of note. This evenings minutes from the recent Federal Reserve meeting could be key to signalling the US Dollar’s next move as recent dovish comments from the FOMC put pressure on the greenback despite some upbeat economic data.
For the UK, tomorrow will be key with recent GDP figures being released. Focus is on economic growth now for the UK given that the run of interest rate rises from the Bank of England has been paused. The IMFs prediction of the UK economy to be the poorest performing in the G7 for 2023 rested on an expectation of interest rate hikes up to 6pc – if this is no longer the case then we need to see the economy bounce back to life for the BofE to be praised for their policy stance. Industrial and manufacturing data is also released for the UK.
With currency markets still looking for direction the recent lull in volatility is likely to be offering a tricky landscape for traders, who seek to make money from market movement. A flurry of activity on the back of moves, when they eventually come, could cause exaggerated swings. So perhaps don’t be tempted to take unnecessary risks with your currency requirements, instead speak to the A Place in the Sun Currency team today to discuss your options.