Tag Archives: week ahead
Big week ahead for sterling exchange rates. Numerous amounts of data that could hamper the pound over the course of this week. (Ben Amrany)
The pound was under some pressure on Friday as the Bank of England (BoE) announced that it would be lending the treasury £35bn pounds to help balance the books and reduce public debt.
BoE Governor Sir Mervyn King said the move equated to modest monetary loosening. (QE) This caught markets off guard and saw the pound slide 0.5% to its lowest level since Sept 6 against the USD and also weakened from a 5 week high against the Euro after the announcement.
All that we know for now is that the Chancellor wrote in a letter to Sir Mervyn King stressing that the cash transferred to the Government would likely need to be paid back to the Bank in the future. Under the arrangement, £11bn is expected to be handed to the Treasury this year, with the remaining £24bn paid in four instalments over the next financial year.
What will happen this week with sterling as a result of the announcement?
What we do not know at present is what the consequences could be with this new move. Will there be more of this? Is this the new policy? The questions are unanswered!!
I feel that the timing of this release was key. It was chosen to be released once the markets were closed so I am inclined to feel that this will weigh on the pound over the course of this week with levels back down to 1.24 against the Euro. The BoE will release its latest growth and inflation projections in Wednesday’s inflation report. Maybe they will give us some answers at that time.
Other important key UK data releases this week include:
Tuesday 13th at 9.30: Inflation data.
Tomorrow we have a whole batch of inflation data which could weigh heavily in the lead up to the BoE quarterly inflation report out on Wednesday. With Inflation seemingly one of teh key releases this week all around the globe I imagine we will see a fair bit of movement over the course of this week for global exchange rates.
Wednesday 14th at 9.30: Employment figures & Claimant count. BoE Quarterly inflation report: Speech by Governor Sir Mervyn King:
As discussed the Quarterly inflation report will be one of the key releases this week with the Governor Sir Mervyn King discussing the outlook in a speech. If you have a requirement to move exchange funds you may wish to look at doing this before the release. If his report paints a gloomy picture then the pound could be under some serious pressure.
Thursday 15th at 9.30 Retail figures.
Always a key data release which ultimately has an effect on the UK GDP figures. Over the Olympics retailers in London stated that retail was down but the GDP figures which came out squashed those thoughts. Retail figures are expected to decline by -0.1% for the month. If these figures are worse then we may see the pound drop towards that 1.24 level come the end of the week.
If you have a requirement to buy or sell the pound you may wish to consider acting sooner rather than later as the uncertainty of the data releases could cause the pound to be extremely volatile this week. If you require a trading account or would like to speak with myself about your requirement and options that are available to you then please feel free to email me at firstname.lastname@example.org
Thank you for reading.
This week ahead is set to be very volatile for sterling against a host of currencies. There are numerous data releases that will have an impact on the pound and a host of other majors. If you require making a conversion on your funds this week then you should keep a close eye on the following data releases and contact me so i can explain how you can benefit from our excellent rates of exchanges. Just drop me an email at email@example.com
Tuesday - For sterling the first major data release will be tomorrow morning in the name of public sector net borrowing. This release captures the amount of new debt held by the UK government. We are expecting levels to come out worse than last month’s release so sterling exchange rates could take a hit tomorrow morning.
Wednesday morning will bring the biggest data release for the UK with the Bank of England’s Minutes. This really will be key as it will indicate how many members of the MPC voted for QE and by how much. If their is any indication that some members wanted more than the £50 billion then it may bring some sterling weakness as further stimulus could be on the cards in the future.
The last major release will be on Friday with revised Q4 GDP figures. This is as big a release as they come. It is expected to show a contraction in growth for the UK economy and if Q1 for 2012 comes out the same then the UK will officially be in a recession. because we are expecting a contraction this Friday the losses may not be so sever for the pound but you may be wise to act well before this release.
For the pound against a host of other currencies you may be interested in the following releases.
Germany and the EU – With a host of data from PMI to GDP rates will be extremely volatile this week. The real key mover will be events in Greece. If they cut their budget which is pretty much expected and receive the agreement for their bailout then expect to see some good Euro strength. This will be key for clients looking at selling back their Euros. Be ready to act quickly though if there is a spike in the market as it may not be around for long!!!
For the US it is a pretty quiet week compared to normal. They have presidents day today so no releases and then over the rest of the week there is some home sales and jobless claims. I expect that the USD will have a range bound from 1.56-1.59 this week. if you see a movement above the 1.59 capitalise on the gain.
Australia – RBA minutes released early hours of Tuesday morning. Same as in the UK and if no indication of further rate cuts down under expect the Aussie to continue its rise of all time highs against the pound.
If you would like to discuss any major data release with us so you can find out how it may affect your currency transfer please feel free to contact me at firstname.lastname@example.org
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Below is an outline of some of the key data releases that could effect your up and coming currency convesion this week. Some of the main ones to look out for must be the Bank of England’s minutes out on Wednesday morning and the second estimate of Q3 GDP out the day after. Have a glance through the list and if you are concerned about how any specific data release may affect your conversion please feel free to contact me at firstname.lastname@example.org. I will then contact you to discuss the options that are available to you.
UK DATA THIS WEEK:
•Tuesday 09.30am Public borrowing for October, previously 14.138 bio
•Wednesday 09.30am Minutes of previous MPC meeting release (9/10 Nov)
•Wednesday 09.30am BBA mortgage approvals for October, previously at 33,130 k
•Thursday 09.30am 2nd estimate of Q3 GDP, previously at 0.5% q/q and 0.5% y/y
•Thursday 12.00 pm CBI Industrial trends for November, previously at -18
US DATA THIS WEEK:
•Monday 15.00pm Existing home sales for October, previously at 4.91 mio
•Tuesday 13.30pm 2nd estimate of Q3 GDP, previously at 2.5% q/q annualised
•Tuesday 19.00pm Minutes of prior FOMC meeting release (1/2 Nov)
•Wednesday 13.30pm Durable goods orders for October, previously at -0.6% m/m
•Wednesday 13.30pm Personal spending for October, previously at 0.6% m/m
•Wednesday 13.30pm Building permits for October, previously at 594k
•Wednesday 14.55pm Final University of Michigan for November, previously at 64.2
•Thursday – Thanksgiving
EU DATA THIS WEEK:
•Tuesday 16.00pm Flash consumer sentiment for November, previously at -19.9
•Wednesday 08.28am Flash German manufacturing PMI for November, previously at 49.1
•Wednesday 08.58am Flash manufacturing PMI for November, previously at 47.1
•Wednesday 10.00am Industrial new orders for September, previously 1.9% m/m
•Thursday 07.00am Final German Q3 GDP, previously at 0.5% q/q
•Thursday 09.00am German IFO business climate for November, previously at 106.4
•Thursday 09.00am German IFO current conditions for November, previously at 116.7
•Thursday 09.00am German IFO expectations for November, previously at 97