By Simon Eastman
Last week was one of retreat for the Pound as a series of underperforming data releases, led to negativity and lower exchange rates. Friday ended the week trading at the lower end of the recent spectrum, in a less than half point range against both the Euro and US dollar.
This week will be led mainly by the Economic Forum on Central Banking, with a vast swathe of talks from central bankers, including the Bank of England, Federal Reserve in the US and the European Central Bank. We also end the month with some key data releases later in the week as the month ends and July begins. As well as data and speeches, markets will be keeping an eye on UK/EU talks regarding the Northern Ireland protocol, where tensions have been escalating recently and some predict may weigh on the pound in the months to come as talks continue.
Any escalation in Ukraine or further sanctions imposed on Russia could also have a negative impact on Sterling, which as we have seen since February when Russia started their invasion, is impacted by global risk sentiment. The pound is seen as a relatively risky investment, whereas the US dollar is seen as a safe bet, a major reason why we are over 10 cents lower buying dollars than we were a few months ago. Further risk aversion from increasing tensions, could weigh heavily on the pound.
So buyers beware and stay up to date by keeping in touch with the A Place in the Sun currency team to guide you through any upcoming transfer requirements.
This week, we have the following speeches and eco stats to affect the markets:
Monday – US durable goods and capital goods orders plus home sales figures. In the evening, ECB President Christine Lagarde speaks at 19.30 followed by ECB member Schnabel speaking at 20.00 as the ECB Economic Forum kicks off in Portugal.
Tuesday – German GFK consumer sentiment survey releases at 7am, followed by another speech from ECB chief Lagarde at 9am, ECB member Lane at 9.30am, ECB member Elderson at 10am and ECB member Panetta at midday, joined by Bank of England member Cunliffe. After lunch, US home price index and consumer confidence data are released rounding off a very talkative day.
Wednesday – AUD retails sales release overnight at 2.30am, ECB member De Guindos talks at 8.45am and again at 9.45am ahead of EU business climate, consumer and economic confidence data at 10am. ECB member Schnabel speaks at 11.15am, then Fed member Mester talks at 11.30am. In the afternoon, German core inflation reports at 13.30 plus US GDP ahead of Fed Chair Powell speaking at 14.00, alongside BofE Governor Bailey and ECB President Largarde, who rounds off the day with another speech at 16.00.
Thursday – UK GDP at 7am, as is German retail sales. German unemployment data comes at 8.45am and an OPEC meeting kicks off at 9am. EU unemployment releases at 10am. After lunch we head across the pond for US inflation, personal income and spending figures, plus Canadian GDP at 13.30. Chicago PMI winds up the month at 14.45.
Friday – July kicks off with a closed market in Canada who are celebrating Canada Day. For the rest of us the week ends with German manufacturing PMI, UK manufacturing PMI, EU HICP (which is a major way of measuring purchasing trends and the change in the price of goods). US manufacturing PMI, employment, new orders and prices paid indices all come out at 15.00 to end the week.
A busy week with the Economic Forum, data releases and month end, as well as just the usual market moving events going on. So if you have a currency transfer to make in the coming weeks or months, give one of the team a call today for some friendly guidance.