It was a positive week for the Pound vs the Euro and US dollar. GBPEUR rates increased 2 1/2 cents where as GBPUSD increased 3 1/2 cents.
As for economic data the week started well with Consumer Credit and Mortgage approval numbers showing a rise however a host of data on Thursday including House Prices and Market Services PMI showed a decline which suggests the Pound should have taken a tumble towards the end of the week.
So why did the Pound make gains, when data suggested we should see a decline?
It’s always important to analyse both currencies when trading not just the currency you have. With Eurozone inflation numbers showing a decline and an ECB meeting on the horizon, investors are selling off their Euros in anticipation that Mario Draghi could increase the money supply entering the Eurozone economy.
As for the US dollar the Presidential election is appearing to start having a negative impact on the economy especially when Donald Trump appears to have a good chance of becoming the next president.
The week ahead
The only major news from the ‘Brexit’ story last week was a statement from France president François Hollande. He has suggested France will not protect the UK border if the UK leave the European Union and migrants will be able to pass through Callas into the UK. However it appears this didn’t have any impact on Sterling exchange rates.
If we see any influential people from the UK join the ‘out’ campaign this week (like Boris Johnson 2 week ago) I believe sterling will lose value against all of the major currencies.
As for economic data the UK are set to release their latest Manufacturing and Industrial numbers 9.30 Wednesday morning. Production has been falling of late due to a slow down within the UK economy and this trend I believe will continue this week. Therefore if you need to transfer sterling into a foreign currency this week, there’s an argument to suggest trading Monday or Tuesday.
Other data releases to look out for are NIESR GDP numbers Wednesday at 3pm and Consumer Inflation expectations Friday at 9.30am.
If you need to trade Sterling into a foreign currency, it’s important to analyse both currencies (GBPEUR / GBPUSD). Email me with the currency pair and your requirement and I will email you directly with my forecast and the process of using our company [email protected]. Alternatively if you would like to discuss your requirements over the phone call me Monday morning on 01494-787478