Quiet end to a flat month

By Grace Smyth

This month began with a bit of a stir in exchange rates, starting the month close to two cents lower against the Euro, and almost 4 cents lower against the Dollar than we saw in January’s close. This month has frankly been a month of pretty flat and dull trading with opportunities to maximise few and far between. Not the best month for anyone with Sterling in hand looking to change it up, although, flip side of the coin, a bit of relief for those looking to buy the Pound back compared to levels seen in January. 

The question is, what are the markets set to look like moving forward. It’s a question we get asked again and again by our clients and unfortunately the answer is never obvious. There is still a lot of pressure weighing heavy on the Pound. The cost of living crisis, inflation, rising interest rates, Brexit fallouts coming out of the woodwork to name but a few. It’s tough to know when and if investor confidence will come back to the pound with enough zing to give the it a much needed boost. It’s going to need something extra special for that, so the more realistic opinion is that the current levels we are seeing are likely to stick around (at least for the remainder of this month).

Today is a mute day for market data, with two bank holidays to consider, in the US and Canada. Tomorrow UK S&P Global PMI surveys of the manufacturing and services sectors are due, and any improvement there is likely to be supportive of Sterling. US preliminary GDP figures are set to be announced later in the week on Thursday. Should we see better than expected results, this could send GBP/USD rates lower again. Also on Thursday BoE’s Catherine Mann speaks at the Resolution Foundation. She is expected to talk about “The results of rising rates: Expectations, lags and the transmission of monetary policy”. She is considered to be the most hawkish of the monetary policy members so if she drops any hints of a preference for a pause in hikes or smaller bank rate increases then the pound could suffer further. At present the market expectation is that the committee will hike rates up to 4.25% in next months meeting. 

 

The rest of the week is also fairly quiet as the big market moving releases have been and gone, however there are a few events timetable in worth noting. 

 

Tuesday

AUD – RBA Meeting minutes are released from their most recent monetary policy meeting.

EUR -S&P Global Composite, Manufacturing and Services PMI(Feb)

GBP – S&P Global/CIPS Manufacturing and Services PMI(Feb) 

CAD – Consumer Price index and Retail Sales 

USD – S&P Global Composite, Manufacturing and Services PMI(Feb)

NZD – Trade Balance

 

Wednesday 

NZD – Monetary Policy and Interest Rate Decision 

USD – FOMC Minutes 

 

Thursday 

GBP – BoE Mann’s Speech 

USD – Preliminary GDP and Jobless Claims

 

Friday

USD -Income and New Homes sales 

 

If you have a currency transaction due in the coming days or weeks then do get in touch with our team here at A Place in the Sun Currency, we can provide various options to help you fix your funds to best suit you and we would be happy to talk them through with you.