By Matthew Boyle
We have a quiet start to the week data wise this week and one in general for the Pound with no releases of major note seen. Despite a dip in GBP following the Bank of England’s decision to cut interest rates it has steadily risen over the past few months – currently sitting close to a two-year high against the Euro and almost a two-and-a-half year high against the US Dollar.
Certainly against the Greenback, the US election and the uncertainty that brings will have helped the Pound reach these levels but undoubtedly it has seemed to gain strength in what to many will have come as a surprise, with Britain now finding itself under a new and unproven government.
Last week GBP>EUR rates closed in on the well-established ceiling we have seen over the past couple of years, as inflation data from both Spain and Germany came in lower than expected, thereby increasing chances the ECB would cut interest rates – weakening the Euro.
However, this changed later in the week with the release of Euro-wide inflation figures showing an overall rise – decreasing then the chance of a cut and so pushing strength back into the single currency.
In a week with very few data releases of note, sentiment will likely drive any movement in rates, so for GBP>EUR we could see the slow decline from last week continue and as such Euro buyers may want to consider acting fast with rates at these levels.
GBP>USD movement may remain relatively flat, although we do have important data from the US released on Thursday with Unemployment and Services data, then critically on Friday with the release of Non-Farm payrolls.
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Data This Week
Tuesday
06.30 CHF Inflation Data
07.00 CHF GDP
14.00 USD ISM Manufacturing PMI
Wednesday
01.30 AUD GDP
09.00 EUR PPI Data
13.45 CAD Interest Rate Decision and Monetary Policy Statement
Thursday
01.30 AUD Trade Balance Data
09.00 EUR Retail Sales
12.15 USD ADP Employment Change
14.00 USD ISM Services PMI
Friday
09.00 EUR GDP
12.30 USD Earnings Data and Non-farm Payrolls