A week of tumbleweed viewing

Today sees a fairly unremarkable week come to a likely unremarkable ending, with virtually no data of serious note, and no expectations of any serious moves.

The week has been very quiet on the data and announcement front, with no serious data at all being released in the UK, and only the fallout from the local and European elections providing any back drop of interest in the UK at all. As a result the Pound has dropped away across the board, suffering from a lack of support, corrections of recent gains, and likely some profit taking ahead of the month end.

In the US we had their GDP figure yesterday which showed the US economy shrank for the first time in three years. Terrible news for the already ailing economy and certainly not what new FED Chair Janet Yellen would have wanted to hear. Continuing tapering of their stimulus packages and possible interest rate rises are likely to be on the backburner for some time now, which might be the end of the recent Dollar revival we have seen.

In Europe all eyes are firmly fixed on next week’s ECB policy announcement. Mario Draghi was critical of the Euro’s strength and quite clear that the ECB will likely need to act and provide further stimulus. If this happens next week then Euro weakness is likely to be the result, but if the ECB hold off then a correction of the recent Euro losses could be in order.
Rates for buying Dollars and Euros are still close to the recent multi year highs so if you have an upcoming requirement make sure you stay in close contact with your CI account manager to be kept informed of what is happening as we enter a new month and the tumbleweed blows away.