End of the week

18 November, 2016

Grace Rae

Yesterday was a fairly flat trading day despite being a fairly busy day for data. The day kicked off with UK retail sales data which came in well above market expectations posting 7.4%. 2.1% better than initially expected. However the market didn’t react to much, a sign that the market s manly moving on Brexit news rather than economic data. Euro Zone inflation didn’t do so well and posted 0.1% under expectations. US inflation was as expected for YoY. U.S. Housing data saw a healthy increase and jobless claims data for the week ending Nov. 11th unexpectedly dropped to 235K, compared to previous weeks 254k. All in all , not a bad result for the U.S.

As the USD rates have improved the see saw effect has truly come into play. The Euro was the biggest loser and now at a 11 month low against the dollar. This comes after Fed Chair Janet Yellen spoke at the US Congress yesterday warning about the risk in delaying a rise in interest rates. She said that a rate hike “could well become appropriate relatively soon”. So it could be likely that we see US rate rise in December. As the Euro has suffered off the back of the U.S election and posting a series of poor economic data the Pound has strengthen and this past week we have seen Sterling Euro rates move up. With these current rates being on the up side, now is a great opportunity to secure your euro’s.

This morning we open seeing Pound-Euro and Pound-Dollar rates up from yesterday’s close of day. Could this be due to ECB President Draghi’s speech this morning? With the rest of today being fairly quiet on the economic data front with only Canadian Inflation figures later at 13:30 we could see another relatively flat day of trading ahead of next week’s EUR & USD Markit Services and Manufacturing data, some key major speeches and UK GDP figures.

This could be a prime opportunity to lock in your currency with our forward contracts. Give the Currency Index team a call today on 01923 725 725 for some friendly guidance.