Currency market data that could cause exchange rate volatility this week

Last week we saw serious volatility on the currency market ultimately allowing the pound to make some good gains across the board.  Key gains from previous week lows, came against the Euro +1.66%, the US Dollar +4.9%, and the South African Rand +2.83%.

This week there are several key releases to look out for from the UK, US and EU.  Whether you are buying or selling sterling all could move the market and affect your transfer.

Today UK house price datafrom Rightmove today has caused a little sterling weakness, reminding the market of the fragile state of the housing market.  Meanwhile inflation data from Germany above expectations has caused a little single currency strength. It is Presidents day in the US so there will be limited volume exchanged this afternoon as the US markets are closed.

Tomorrow the key data from the UK is Public sector net borrowing at 09:30.  This has been a key issues for the Government and expectations are for a far lower figure than previous.  this could cause sterling strength if it looks like the coalition are bringing borrowing under control. At 15:00 US consumer confidence could cause USD movement, expectations are for a higher figure than last month, for me this could be a little ambitious.

On Wednesday at 09:30 we have the Bank of England Minutes, these could be huge for sterling as there has been massive speculation surrounding interest rate hikes in the UK lending support to the pound.  The breakdown of how the member voted may sheds some light on how likely a hike in interest rates is.

 At 07:00 on Wednesday we have German GDP data, and from the US at 13:30 jobless Claims.  The latter is renowned for causing volatility as the release can differ dramatically to expectations as the US labour market is so vast.

We round off a busy week with UK GDP at 09:30 and US GDP at 13;30 on Friday.  UK figures will be carefully watershed by speculations and investors following 2010 Q4’s shocking GDP data showing a contraction of 0.5% in the UK economy.  Another quarter of negative growth would mean that the UK is officially back in recession, so this months figure could give some insight into the likelihood of this.  There is also some speculation that Q4 could be revised upward therefore lessening the chance of a double dip recession.