By Matthew Boyle
Last week saw the biggest loss for the pound since September of last year- losing around 2% against the single currency.
Concerns over the viability of the Astra Zeneca vaccine combined with rumors of the ECB tapering quantitative easing were the main cause, add some profit taking in the market given the Pounds stellar gains made so far this year.
As shops and pubs in the U.K. open again today the market remains fairly bullish regarding the Pound with GBP longs currently leading the speculative FX market.
With the economic wheels in the UK turning again it is likely we will see some GBP strength. And despite widespread concerns with the Astra Zeneca vaccine, the UKs programme continues to outpace Europe and lead the way so it is likely we will see momentum gain and buying rates improve.
However as we know in the Fx markets – nothing is certain or guaranteed.
As we have seen before as the shackles of lockdown have been lifted and the gates have opened people have gone wild – parks and pubs are packed and consequently cases have risen and lockdown has been reintroduced.
And let us not forgot of course of the ever lurking dangers of a new strain being introduced or a mutation.
Of course we pray this is not the case but should this happen and lockdown be reinstated the economy would come to a halt again and the effect on exchange rates would be rapid with the current opportunity lost.
So should you have any upcoming requirements speak to your broker today for some friendly guidance on how to reduce the risk of your upcoming transaction.
Data This Week
09.00 EUR Retail Sales
13.00 GBP BoE Tenreyro speech
18.00 USD Monthly Budget Statement
23.01 GBP BRC retail sales
N/A CNY Trade balance, Imports and Exports
06.00 GBP GDP, manufacturing and industrial production figures.
09.00 EUR German ZEW survey
12.30 USD Inflation data
01.00 NZD RBNZ Rate statement and Interest rate decision
09.00 EUR Industrial Production
18.00 USD Fed Beige Book and Feds Williams Speech
01.00 AUD Employment Change and Unemployment Rate
06.00 EUR German Harmonized index of consumer prices
12.30 USD Retails sales and Jobless claims
00.00 EUR Eurogroup Meeting
02.00 CNY GDP and retail sales
09.00 EUR Inflation data
14.00 USD Michigan Consumer Sentiment Index