By Simon Eastman
Last week the pound fared ok against both he euro and US dollar, albeit losing ground towards the end of the week.
GDP came out on Thursday lower than was hoped, staying at -0.1 percent, rather than the slight growth expected to 0.1 percent. As a result, markets focused again on lower interest rates when the Bank of England meet on Thursday as slowing growth leaves the door wide open to cut interest rates, already around 80 percent priced in for a 25-basis point cut and was the reason why sterling lost ground on Thursday and Friday.
This week is not just about the BoE though, with a raft of key data releases over the week for the UK, EU, and the USA, all of which could have an impact on your upcoming currency purchase, specifically those with sterling in hand looking to buy euros or dollars.
The week eases in with just EU industrial production this morning and Canadian inflation this afternoon and a couple of speeches from US Fed members to affect those looking to buy the Loonie or greenback.
Tuesday kicks off early with UK unemployment data including average earnings and the claimant count (indicating the change in those seeking work on jobseekers’ allowance). We then have German, EU and UK manufacturing and services PMI plus German and EU trade balance and ZEW economic sentiment surveys before heading across the pond. Due to the government shutdown previously, we have a double helping of data releases including October and November’s average earnings and unemployment rates and both months non-farm payroll readings. In addition to all this, we get Octobers retail sales and finish off with the current (Dec) manufacturing and services PMI readings.
Wednesday is all about inflation, with the UK reading early doors at 7am. German IFO business climate and expectations data comes out at 9am followed by EU inflation at 10am. For any Kiwi dollar buyers, GDP reading comes out at 9.45pm where a big increase is expected but as we saw with the UK reading, it could well suffer if the actual reading doesn’t hit the mark.
Thursday is the big day for interest rates, with the Bank of England decision at midday followed by the European Central Banks meeting at 1.15pm. No rate change is expected for the ECB so if the BoE cut rates, the euro will be the winner from an investor point of view, and we could see GBPEUR slide. The ECB is followed closely by US inflation readings and the Phili Fed manufacturing survey ahead of the ECBs press conference at 1.45pm. At the time of writing, it doesn’t seem lie the BoE will be holding a press conference so markets will be left to speculate over the future direction of the Banks interest rate policy.
Finally, the week closes off with the Germa Good for Knowledge consumer confidence survey and PPI data, plus US retail sales both at 7am. The morning then has a few EU central banker speeches ahead of Canadian retail sales, EU consumer confidence and US consumer confidence expectations and sentiment surveys at 3pm.
This week is like a Santa sack full of market data and will almost certainly have a big impact on those with sterling in hand looking to buy that Place in the Sun. With Christmas round the corner, get the upcoming currency requirement out the way early and speak to one of the friendly team today to discuss your options ahead of this wintery flurry of data that feels more like an avalanche coming our way. Call today and let us help make your money go further.