GBP to make further ground on Euro
8 September, 2014
Last week was a relatively quiet one for the Pound as there was little out in the way of data releases, although this did not stop significant movement as all eyes were on the European Central Bank’s decision on interest rates on Thursday.
There was a fair bit of volatility for GBP over the course of the week, however, as we saw Sterling drop over a cent against the Euro and over three cents versus the US Dollar, largely due to lack of data to strengthen the recent gains made against those two currencies. Negative manufacturing data and a drop in mortgage approvals did little to help either. This was in stark contrast to the US where the Dollar made significant gains against both Euro and Sterling due to its own positivity in the results surrounding local construction and manufacturing Stateside, on Tuesday.
We had to wait until Thursday for the Pound to make up the losses it had suffered earlier in the week with the Bank of England again holding firm with no changes to their interest rates. On the opposite side of the “see-saw” we had the European Central Bank slash all its main interest rates and it announced a programme to buy private assets in order to prevent slide into deflation in the future. This news caused the Euro to slump over a cent against the Pound and a cent-and-a-half against the US Dollar.
Further positive USD figures released were bullish and included better than expected results for both inflation and trade balance.
This week we see the following major events and data releases:
Halifax house prices (UK) – down 0.5%, 0.2% lower than expected
Bank of England Governor Mark Carney gives speech on pay at the Trades Union Congress
UK Trade balances (09:30)
UK Manufacturing and industrial inflation figures (09:30)
GDP estimate (15:00)
Inflation report hearings (UK)
Employment change and inflation figures for Industry (EUR)
Retail sales (USD)
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