Last week, the pound has ended the trading week slightly down against most major currencies, with interbank levels currently sitting in the 1.14s for GBP/EUR, the 1.23s for GBP/USD, the 1.72s for GBP/CAD and having just slipped into the 1.89s for GBP/AUD to name a few examples.
Boris Johnson’s to Announce His Lockdown Strategy
With the country and financial markets eagerly awaiting Boris Johnson’s lockdown strategy announcements due out this evening, this could pose quite a volatile start to the trading day on Monday. For those that are not aware the markets will start moving on Sunday night once the Asian session is up and running, so by the time we wake up for a Monday morning coffee the reaction to Boris’s plans would have most likely already taken place.
Lockdown exit strategies are being closely monitored around the world at present and the general feeling is that those countries and economies that spring out of the gates and get going again quickest (without further problems or disruption) could likely benefit, which would potentially also give their associated currencies a boost in strength too.
What Events Could Affect Pound Sterling Exchange Rates This Week?
Monday gives us a fairly quiet start to the week in terms of data, but markets will likely still be digesting the UK’s plans so this doesn’t necessarily meant the day will be a quiet one.
Tuesday afternoon brings us US inflation data following a fairly quiet morning for Europe, and overnight on Tuesday night we have the RBNZ (Reserve Bank of New Zealand) interest rate decision and monetary policy statement, which could cause some movement for the New Zealand Dollar.
Wednesday is an important one for UK data as we will have the release of growth (GDP) and trade balance figures for the UK, the Bank of England suggested that this pandemic will have hit the economy hard, similar to the vast majority of other economies around the world, but a really poor figure here could still cause damage to the value of sterling. Overnight on Wednesday we have Australian unemployment figures where we have expectations of a rise to 5.5% from last months 5.2% so we would expect to see a bit of movement for GBP/AUD overnight depending on what the figure posts at.
Thursday gives us a quiet morning again, but with US jobless claims in the afternoon the volatility could heat us as the day progresses. U.S unemployment is becoming a big talking point at the moment, due to the sheer volume of individuals over there seeking assistance due to being out of work. This figure may impact general market sentiment and could impact all major currencies.
Finally, on Friday we have a big morning for the Eurozone with a flurry of GDP or growth data, employment data and trade balance,, it is likely to expect a volatile few trading hours for Euro exchange rates as investors wait to see the impact covid-19 has had so far over there. Later in the afternoon we have US and Canadian retail sales figures, which may throw up some movement for the USD and CAD to round off the trading week.
Not only do we have all of this data to come out, all eyes will also still be on the number of cases released daily around the world and the impact that the current exit strategies are having on those. We have the minor, almost forgotern subject of Brexit negotiations to contend with which will remain ongoing and could lead to sterling exchange rate movements at any time, and finally the oil situation. It was suggested last week that oil storage capacity may run out by mid-May which would likely cause large volatility on oil prices and associated currencies, so this will also be one to watch.
With all this in mind we have a busy week of trading ahead, if you have a currency exchange to carry out in the coming days, weeks or months ahead then please feel free to get in touch with us directly by filling in the form below and one of our experienced team will be happy to support you with their knowledge alongside being proactive and helpful so that you are best placed to make the decision when to trade.