Currency report this week

This week sees important data out in the UK, which is likely to determine the short term fortunes of the Pound. Tomorrow sees key consumer inflation figures, Wednesday we have unemployment and the Bank of England minutes, Thursday is retail sales and on Friday the latest public sector borrowing figures.

The fragility of the UK economy has been reflected by falling exchange rates against most currencies in recent weeks, with the exception of the Euro which of course has its own well documented troubles. Any negative news for the UK economy is likely to push sterling lower, even against the Euro.

Rates for money transfers to the USA in Dollars (or for pegged currencies such as the UAE Dirham) fell last week to near their lowest this year. The Federal Reserve have made it clear they will only inject more money into the US economy in quite extreme circumstances, which has given the USD strength compared to the Pound where the Bank of England have extended Quantitative Easing more liberally. Ben Bernanke’s speech tomorrow afternoon will be keenly watched by anyone with an interest in US Dollar rates.

Today there is no important UK data due out, but Eurozone inflation and US retail sales may both affect their respective exchange rates. For a quote on your own transaction and our opinions on the market, contact us on 01923 725725.