US Data This Afternoon Noteworthy But Next Week Is Crunch Time For Most Exchange Rates (Colm Gilhooly)

GBP USD Rate Consolidates on Interest Rate Expectations

USD

US GDP data this afternoon is likely to have some bearing on global confidence, and certainly may impact on exchange rates for the US Dollar which has been strengthening over the last few days versus a pound with little data out to support it, and a Euro which is coming under fire from speculation over ECB policy.  In my mind it is unlikely to cause huge shifts in the market, unless of course the figures are well wide of the mark, because most sentiment around the Dollar is largely being dictated by the dovish tones of the Janet Yellen and the Federal Reserve.

Nest week we have Manufacturing PMI for the States on Monday and round off the week with US non-farm payrolls, which could be the catalyst for USD strength if they show improvement as they may encourage a cautious Fed to consider changing stance.  I think the USD is undervalued and will gradually strengthen back slightly as economic conditions improve stateside, however it is likely to be a rocky road as all the uncertainty will keep the currency markets jumping one way and another.  If you are looking to buy USD then feel free to email [email protected]  and I would be happy to help.

EUR

We also have German retail figures out tomorrow morning but again next week is key for short term Euro exchange rates.  We have CPI data out on Tuesday and GDP out on Wednesday, and then on Thursday it is the one everyone has been waiting for – the ECB rate decision and press conference.  Weak European inflation and low growth rates, acknowledged as a concern by the ECB, have led many to believe there could be some policy change by Draghi & Co to stimulate things and this has resulted in the pricing in of a weaker Euro over the last couple of weeks.  If there is some change (eg a further interest rate cut, or some other extraordinary measure) then we could see the Euro weaken further, but no action may give a reprieve to Euro sellers in the short term.  If you are buying or selling Euro and want to use our currency transfer service to get the best exchange rate, then feel free to email Colm at [email protected] and I would be happy to help.

GBP

We do have some mortgage approvals and housing data next week alongside Services PMI, all of which could continue the positive perceptions of the UK economy, but it seems unlikely we will see any change of policy by the MPC at the Bank of England meeting given their recent public comments.  In all I expect the pound to be relatively well supported against most currencies as I dont expect the data to be anything other than positive.

AUD

If you are buying Aussie Dollars, then not only will all the US data have an impact due to the influence it will have on global monetary policy, but we also have the next RBA decision in the early hours of Tuesday morning and then the latest GDP releases on Wednesday.  The RBA have stopped any possibility of further interest rate cuts however they have acknowledged the strength of the AUD is a concern and have lowered growth forecasts for the following quarters as a result in a move no doubt designed to weaken the currency and boost exports.  Again because of the importance of the news I think it would be worth preparing to move quickly in case of a big spike or trough caused by these announcements- stop loss and limit orders seem to have worked well on the Aussie recently so if you want to find out how you can use us to do this then feel free to email [email protected]

CHF

Not much in the way of Swiss data out until the end of next week but the CPI figures will be important.  however the Swiss Franc is likely to be heavily influenced by global sentiment so watch USD EUR rates closely, and obviously the UK releases as well!

CAD

Canada also has its interest rate decision next week on Wednesday and jobs figures on Friday.  The CAD has strengthened significantly in the last month against the pound and I expect that these announcements could be an opportunity however GDP figures this afternoon are more likely to have an immediate impact so forget next week for now and concentrate on this afternoon!  Once again if you would like help to get the best deal on your currency, especially if buying Canadian Dollars, or need to sell the loonie, then why not see what we can offer compared with your bank?  Email Colm at [email protected] and we can go through some figures and compare savings.

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As a company we specialise in foreign exchange for currency transfers- the blogs are designed to give extra information so you can time your exchange and keep a track of the currency market.  However the real benefit comes from the exchange rate we can offer to save you money so don’t be shy get in touch and see what rates we can offer you.  Simply email Colm at [email protected] and I would be happy to go through an overview of your requirements and see what we can do to help make the transfer as easy and cost effective as possible.