By Matthew Boyle
Last week saw GBP>EUR rates surge to a 3-month high. This was in many ways driven by EUR weakness as it looks more likely Russia will completely shut down many countries’ gas supplies. With fears mounting over what is already a diminished supply being reduced further, The European Union have agreed a rationing plan which will only hamper economies further as we move towards winter months. With the single currency weakened this allowed GBP to push to these 3-month high levels as markets speculate as to what the outcome will be on Thursday as we see the Bank of England policy meeting where they will announce if there will be a change to the interest rate in the UK. Currently it seems markets are split down the middle as to whether we will see a 0.25% or 0.5% hike.
0.25% is likely as last month showed that previous BoE measures may be having effect with inflation seeming to slow – only rising by 0.1% . However, with gas prices continuing to rise with no end in sight to get ahead and not undo the work done so far, we could see a 0.5% hike.
In what is a relatively quiet week in terms of data, all eyes will be focussed on Thursday. It will be this decision that will sets the tone for GBP rates, so expect rate movement this week.
If you have an upcoming transfer to make speak to your consultant today for guidance on how to avoid potential increased in the cost of your transfer due to adverse movements in rates.
Data releases this week
06.00 EUR German Retail Sales
14.00 USD ISM Manufacturing PMI
04.30 AUD RBA Interest rate Decision
22.45 NZD Unemployment Change
09.00 EUR Retail Sales
14.00 USD ISM Services PMI
01.30 AUD Trade Balance
11.00 GBP Interest Rate decision & Monetary Policy Report
12.30 USD Jobless Claim
01.30 AUD Monetary Policy Statement
12.30 USD Non-Farm Payrolls
12.30 CAD Unemployment rate