Currency Markets are Loathed to Strike Out in any Direction

18 February, 2019

Tom Arnold

The last week on the markets was fairly uneventful from a currency perspective with relatively little movement of note for GBP related currency pairings. This is mainly due to the ongoing stasis with regard to Brexit. With the government in “kicking the can down the road” mindset, the currency markets are loathed to strike out in any direction. Last week’s loss in the House of Commons for the government was not binding, and was of little note given the government’s strategy of dragging negotiations down to the last minute to try and force through the Prime Minister’s unpopular deal, and so the Pound wasn’t dramatically affected – apart from a small gain with “no deal” seemingly a little less likely.

In other news the week ahead is a busy one on the eco stats front, with plenty of data due out from all of the major zones, with UK unemployment on Tuesday, the US FOMC minutes on Wednesday and European CPI Inflation on Friday as the highlights in a busy calendar.

UK House Price Index

UK Unemployment Rate
European ZEW Economic Sentiment Survey

German PPI
US FOMC Minutes

German CPI Inflation
European Markit Services PMI
European Markit Manufacturing PMI
UK Public Sector Net Borrowing
US Durable Goods Orders
US Markit Services PMI
US Markit Manufacturing PMI

German GDP
European CPI Inflation

As we have become accustomed to; the market’s focus is very much locked in on everything related to Brexit, but this week each month throws up many of the more important data releases of note from the major zones, and so it is worth keeping these in mind if you have an upcoming currency requirement. Assuming GBPEUR will only move if Theresa May gives an important soundbite could be costly if the European GDP takes an upturn for example… So stay in close contact with your CI account manager to be kept informed of exactly what is happening and to make sure you know exactly what options are available to you to protect yourself from adverse market movement.