GBP-EUR trend continues south during quiet week

Last week was another poor week for the pound with an absence of any data to hold up exchange rates, the negative trend and sentiment towards Sterling continued to drive rates lower with the GBP-EUR trend losing another cent over the week and making a new 8 year low. The US Dollar is the only currency really matching the weakness of the pound at the moment with rates closing last week just as they started it. This therefore keeps the Euro very much in the driving seat as it continues to push higher against all its major pairs.

Friday’s trading provided a couple of lower impact announcements with German GDP confirmed at 0.8%in the morning and US Durable Goods orders in the afternoon came in worse than expected at -6.8%, down from +6.4% last month. The meant it was another day of gains for the single currency against the greenback, up around 1 cent by close of play. These gains were also aided in the afternoon after a speech from Janet Yellen at Jackson Hole failed to assure the markets of further rate hike plans and instead focussed on the ‘all-too familiar risks’ that remain in the current climate. This created weakness is the USD which means strength in the Euro, and a further decline in the GBP/EUR trend during the afternoon session, but nice gains against the USD recovering previous day’s losses.

https://www.cnbc.com/2017/08/25/yellen-system-is-safer-now-though-all-too-familiar-risks-remain.html

The week ahead is much of the same with a quiet calendar of stats until the new month kicks off on Friday. Unfortunately for the pound its current GBP-EUR trend, no news has meant bad news, bad news has been terrible news, and even good news has been ignored only provided stability at best. Euro buyers in particular may wish to consider their short term options if you have not fixed your exchange rate already. Ask about our forward contracts where you can remove the risk of a dropping market with a guaranteed rate for up to 2 years.

Announcements to watch out for this week are as below:

Wednesday

9:00am – Eurozone Confidence and Sentiment figures

10:00am – UK Inflation report hearing

1:30pm – US GDP revision

Thursday

9:00am – German Unemployment Rate

10:00am – Euro-zone Unemployment & Inflation figures

Friday

9:00am – Eurozone Manufacturing & Services PMI

9:30am –  UK Manufacturing PMI

1:30pm – US Non-farm payrolls & Average Earning

3:00pm – US Manufacturing PMI