Exchange rates poised for GDP and retail sales

Last week was an eventful one for the Pound – inflation was the main cause of movement, with significantly lower than expected figures casting doubt on the likely timing of interest rate rises. As a result we saw Sterling exchange rates drop quite dramatically – against the Euro we dropped to a low not seen since before the Scottish referendum, a whole 4 cents off the recent highs. Markets did however correct as the potential for another recession in the Eurozone, and UK data continuing to show the British economy is definitely on the right track, caused some of the inflation fears to subside.

As the new week begins we find ourselves some way off the post referendum highs, but at least significantly up on the lows achieved last week.

The week ahead is an interesting one, with almost no data of significance due out until Wednesday. When Wednesday does arrive though, there is a raft of key data out to keep the markets interested:

Wednesday

Bank of England Monthly Policy Meeting Minutes

US CPI Inflation

Thursday

European Manufacturing PMI

UK Retail Sales

US Jobless Claims

Friday

German Consumer Confidence

UK GDP

US New Home Sales

The Euro is under significant pressure with many of the recent data releases coming in below expectations, and many key observers speculating as to whether slowing French and German economies could see the whole bloc drop into another recession. This week there is not much in the way of supporting data, and with some key UK data in the pipeline, it will be interesting to see if the Pound can claw back anymore of those recent losses. The US has a reasonably quiet week to look forward to, so likewise, can the Pound make any gains here?

Stay in close contact with your CI account manager to be kept informed of exactly what is happening, how the week’s currency news is affecting the markets and therefore the impact on your upcoming currency purchase.