Dollar up Euro down Pound taking advantage

21 November, 2016

Tom Arnold

Last week was a continuation of the previous week’s activity on the markets, with the Dollar making gains, the Euro losing out and the Pound managing to make some headway. The Euro v Dollar rate is now at an 11 month low thanks to the Dollar’s surge following the election victory for Trump, and this was further helped last week, by Janet Yellen hinting that an interest rate hike in December is still very much on the cards.

The Pound had a mixed week, with Sterling negative news in the form of lower than anticipated inflation and a higher claimant count, but Sterling positive news with the unemployment rate lower and retail sales higher. This led to some modest gains against a basket of currencies, but against the Euro we managed to hit 2 month highs, with the Dollar’s surge tipping the major currency see-saw against the Euro and helping the Pound out.

The week ahead is a busy one, if not crammed with masses of critical data. We have to wait until Wednesday before any big hitters come in, with various PMIs due and the FOMCs minutes in the evening, and then Thursday and Friday provide some crucial GDP figures at home and in Europe. Thursday is also notable as Thanksgiving Day in the US, and then we have the insanity of Black Friday for all of the retailers to look forward to.

ECB President Draghi Speech

UK Public Sector Net Borrowing
US Existing Home Sales
European Consumer Confidence

German Services + Manufacturing PMI
European Services + Manufacturing PMI
US Jobless Claims
US Durable Goods Orders
US Manufacturing PMI
Federal Reserve Policy Meeting Minutes

US Thanksgiving Day
German GDP
UK Mortgage Approvals

UK House Prices
US Trade Balance
US Services PMI

The Pound is currently trading at very good levels against the Euro given the Brexit backdrop and this opportunity could be exactly what you Euro buyers have been waiting for. Article 50 is still expected to be triggered early next year and with it we can expect another drop in Sterling’s strength, so this unexpected boost, thanks to Trump and Yellen, could be the perfect opportunity to book a forward contract and remove the risk from the market. Speak to your Currency Index account manager today to discuss your options.