Data this week driving markets

GBP EUR Exchange Rate: Weekly Review July 16  

Regular readers will be aware that we categorise events that affect the currency market into 4 types:

  1. Terrorist attacks,
  2. Acts of god,
  3. Political events,
  4. Economical events.

The first 2 we have to be extremely reactive to, the 3rd we can almost expect but mostly again we have to be reactive to, the last is where a majority of forecasts are made from. This is as economic data is scheduled and forecasts are normally made against the previous month and year.  In summary there are about 30 reports for each country and as they are normally reporting on the previous month, these are normally released at the beginning of the month.  Due to the volume that are released we categorise them into 3 types, in order of how powerful or influential they are on the market. For example an interest rate decision is graded 3, the post powerful, whereas house building numbers are graded 1 as it traditionally has a much smaller effect on exchange rates.

Currently as we are at the beginning of the month there is a lot of data due in the coming days, that will have an effect on every currency pairing. The key ones for most of our regular readers are:

  • Tuesday 5:30 – Australia interest rate decision – Grade 3

This is expected to stay the same however any change will affect a number of currencies in the region

  • Tuesday 9:30  – UK Mortgage approvals, construction figures, and Money supply – 4 reports Graded between 2 and 3

The overall forecast is for a contraction and as a result expect sterling weakness early tomorrow

  • Tuesday 10:00 – European Production Price Index – Graded 3

An expected fall that could weaken the Euro and potentially strengthen the dollar as a result

  • Tuesday 15:00 – USA Factory Orders – Grade 2

Expected to improve significantly and as a result the dollar could become more expensive to buy in tomorrow trading

  • Wednesday 10:00 – European Retail sales – Grade 3

Forecasted to improve so again, expect euro strength if the data comes out as expected

  • Thursday – KEY DAY – EUROPEAN AND UK INTEREST RATE DECISION

This is the major day in my opinion this week for everyone with exposure to the markets. Interest rate change is predicted along with confirmation of additional Quantitative easing

If you are looking at exchanging a more rare currency and would like more information, or would like to discuss these in more details feel free to contact me. I would be happy to help. Call on (+44)
1494 787 478
or email me directly at [email protected]