By Tom Arnold
Last week was a disappointing week for the Pound against the Euro, with rates dropping around two cents across the week, largely driven by negative UK data. Unemployment figures and GDP results were both significantly worse than expected, and the Chancellor’s spending review failed to provide any support for the Pound.
Sterling did manage to hold its own against the US Dollar though, which is struggling itself with poor economic performance at home in the US, a population increasingly at odds with the government, and all coupled with a vast array of global events, which are causing turmoil for the usually stable US Dollar. The ongoing wars in the Middle East are surely a huge driver of this uncertainty and with threats being made directly against US interests this cannot be helping the Greenback to hold its own.
The week ahead is hugely busy with various inflation releases and critically both the interest rate decisions from the UK and the US. With inflation and interest rates so important for the strength of currencies, the week ahead could be critical, especially in light of the movements we saw last week. Will the Pound be able to pull back any of its loses? With the prospect of interest rate cuts from the Bank of England very much up in the air, it will be all important to listen to what Governor Bailey has to say in his accompanying press conference.
Monday
ECB Member speeches
Italian CPI inflation
Tuesday
EU ZEW Economic Sentiment survey
US Retail Sales
US Industrial Production
Wednesday
UK CPI Inflation
EU CPI Inflation
ECB Member speeches
US Fed Interest Rate Decision
Thursday
Australian Unemployment Rate
UK BoE Interest Rate Decision
Friday
UK Retail Sales
German PPI
Please make sure to stay in close contact with your account manager to be kept informed of what is happening in this volatile period and what your options are to remove the risk of negative market movements.