By Ashley Finill
This week Sterling has continued its unpredictable trend, as in the last couple of days it has seen drop off against the Euro after signs of recovery seen on Friday have been reversed. This downside trend for the Pound is mainly due to US Dollar Weakness, which in turn has strengthened the buoyant Euro. Over the past 2 weeks, Sterling has lost over 2 cents against the single currency. It’s not all bad news for Sterling though, as it continues to make gains on the under-pressure US dollar, so should you have a requirement for USD or AED then now could be a great time to lock in an advantageous rate whilst they are still here. The GBP/USD is seemingly at the top of the current trend as it tries to break out into new ground but when testing the top of resistance level, the Pound retreats which is usually a sign that we are at the best levels now. Should you have a requirement for USD it may be prudent to get in contact with your currency consultant today to discuss your options.
US/Russia Talks
Yesterday afternoon US president Donald Trump and Russia’s Vladmir Putin spoke on the phone to try and reach an agreement for a ceasefire in Ukraine and bring an end to the 25-month long conflict. In the 90-minute call a partial ceasefire had been agreed on Ukrainian energy infrastructure for a period of 30 days. As we have seen over the past couple of years conflicts have a great bearing on the currency market and tensions in Gaza have resumed, which could likely see further volatility going forward.
Interest Rate Decisions
A busy couple of days are ahead as both the Fed in the US and the Bank of England will announce their interest rated decision on Wednesday and Thursday, respectively. Starting with the Fed this evening at 6pm, they are widely expected to hold their interest rate which is currently at 4.5%. US inflation currently sits at 2.6% which is below the Fed’s 2% target, with Trump’s tariffs causing havoc in the markets, there are concerns that they will cause fresh spikes in prices which would increase inflation in the country, slow spending and keep interest rates high. Tomorrow afternoon, The Bank of England also announce their interest rate decision. They again are expected to hold interest rates which currently sit at 4.5%, a hold being generally good news for Sterling. However, should there be a shock and the BoE decide to cut, then Sterling could be in for a turbulent end to the week. Should you not like to take risks and have a requirement for currency in the next few weeks then get in contact today to discuss your options and plan ahead.
Data remaining today & this week
With 3 working days left this week there are still a number of data releases that are likely to affect the currency market. Starting this morning at 10am, the EU post Core Harmonized Index of Consumer Prices, this figure is expected to come in at last month’s figure of 2.6%, should this be wildly different then we can expect some volatility early doors. There are also a couple of speeches across the day from ECB MPC members. Into the evening, as already mentioned at 6pm the Fed announce their interest rate decision and a hold at 4.5% is expected. The final release today is GDP from New Zealand at 9.45pm. Onto Thursday, in the early hours Australia post the unemployment rate in the country. At 7am, Germany post PPI data, this is expected to be a better figure of 0.1% from the previous -0.1%. At the same time, the UK post the unemployment rate which could cause some volatility in the early morning trading. At 12pm, the BoE announce their interest rate decision in the UK, which again is expected to hold at 4.5%. Into the afternoon and stateside, Initial Jobless Claims are posted at 12.30pm. Into Thursday Evening, Bank of Canada’s Governor Tiff Macklem speaks and finishing off the day New Zealand post Imports, Exports and Trade Balance at 9.45pm. Finishing off the week, The UK posts GFK Consumer confidence in the early hours. On Friday afternoon, Canada post retail sales at 12.30pm and to end the week, the EU posts consumer confidence at 3pm.