By Ashley Finill
Last week Sterling continued its rally, making further gains against the Euro and reaching levels we’ve not seen since this time last year. The Pound has found support from a combination of stronger confidence in the UK and continued weakness in the Euro. Markets have also reacted positively to the growing expectation that Andy Burnham could become the next Labour leader, with investors viewing the political outlook as more stable. At the same time, recent economic data from the Eurozone has disappointed, putting additional pressure on the single currency and helping Sterling push higher.
Whilst the Pound has enjoyed a strong run recently, it’s worth remembering that exchange rates rarely move in one direction for long. Currency markets can change quickly, particularly when there are political developments or new economic figures released, so it’s important not to assume the current levels will remain available.
Looking ahead to this week, there are several economic updates due from both the UK and the Eurozone which could create further movement in the market. Investors will be looking for signs that the UK economy continues to perform well, while any further signs of weakness from Europe could continue to support Sterling. Equally, any unexpected headlines could quickly change sentiment and see rates move in the opposite direction.
Although the overall outlook for Sterling remains positive for now, there is still plenty of uncertainty ahead, meaning we could continue to see volatility throughout the week. If you have an upcoming currency requirement, it’s worth keeping a close contact with your currency consultant and considering securing your currency now at the new highs we are seeing now.
Monday
7:00am – EUR – German Factory Orders
9:30am – EUR – Sentix Investor Confidence
10:00am – EUR – Producer Price Index
10:00am – EUR – Retail Sales
2:45pm – USD – S&P Global Composite PMI
3:00pm – USD – ISM Services PMI
3:30pm – CAD – Bank of Canada Business Outlook Survey
4:00pm – EUR – ECB’s Schnabel Speech
4:00pm – USD – Fed’s Waller Speech
5:00pm – EUR – ECB President Lagarde Speech
5:45pm – GBP – BoE’s Mann Speech
7:30pm – EUR – ECB’s Lane Speech
Tuesday
7:00am – EUR – German Industrial Production
10:30am – GBP – Financial Stability Report
1:15pm – USD – ADP Employment Change
3:00pm – CAD – Ivey Purchasing Managers Index (PMI)
3:15pm – GBP – BoE’s Mann Speech
Wednesday
3:00am – NZD – RBNZ Interest Rate Decision
4:00am – NZD – RBNZ Press Conference
8:30am – EUR – ECB’s Escrivá Speech
7:00pm – USD – FOMC Minutes
11:30pm – NZD – Business NZ PMI.
Thursday
7:00am – EUR – German Trade Balance
7:00am – EUR – Eurogroup Meeting
10:30am – GBP – BoE’s Breeden Speech
1:30pm – USD – Initial Jobless Claims
2:00pm – USD – Fed’s Williams Speech
3:00pm – USD – Existing Home Sales
Friday
7:00am – EUR – German Inflation
7:45am – EUR – French Inflation
8:15am – EUR – ECB’s Vujčić Speech
1:30pm – CAD – Average Hourly Wages
1:30pm – CAD – Employment Data
1:30pm – CAD – Unemployment Rate