Busy week for currencies

17 December, 2012

Simon Eastman

This week starts off quietly on the data front with only Rightmove house price data out for the UK along with EU trade balance figures. The markets will be looking forward to Tuesday when a flurry of UK data is released.

We have inflation figures for the UK along with the Bank of England’s quarterly inflation report which is likely to bring some volatility to the pounds performance depending on the outcome. Lower inflation could open the door to further QE, which as we have seen in the past, normally weakens the pound. Although with recent increases in utilities costs inflation could well have moved up.

Bank of England minutes on Wednesday and GDP on Friday are further key releases for the pound so in the run up to Christmas we could see further volatility for sterling.

Last week the pound lost out against the Euro consistently across the week so any poor releases are likely to compound this. If you have a payment to send to Europe it could be wise to tie it up early in the week, avoiding disappointment over the rates and allowing focus to turn to more festive things, as the last few shopping days before Christmas tick away.

Against the US dollar, the pound fared well last week, ending up at fresh highs on Friday. Mainly due to Euro strength than anything else, but still providing decent trading levels for any dollar buyers. US inflation figures, house sales and the Redbook are some of the main releases this week so make sure to stay in touch with us here at Currency Index if your looking to buy some bucks.