Hint at Euro interest rate cut gives GBP breathing space

25 January, 2016

Matthew Boyle

Last week at its start looked like another catastrophic week for GBP its losses continued. However it was Thursday that saw a turnaround for its fortunes as Mario Draghi announced that there may be further Euro interest rate cuts in likely in March. As a result the Euro weakened and allow the market to gain against the single currency. Most notably it allowed the pound to claw back some of its recently lost ground – almost 3 cents by the close of the week’s trading. Whilst this is likely welcome news for many don’t assume however that these gains will continue though, and has we have seen in the last month or so rates can move very quickly.

The USD also weakened slightly last week allowing both GBP and EUR to make gains. This is likely a short-term correction though given that in recent weeks since the announced rate hike in December the Dollar has almost continuously gained. With markets suggesting it is currently 50/50 for another FED hike in March it may not be long before GBP>USD rates continue to slide again.

Indeed this morning we have already seen GBP lose nearly a cent against both the Greenback and single currency amidst no market data, so already we could be seeing the market correct. So if you have upcoming EUR or USD requirements you would be well advised to speak to your Currency Index broker sooner rather than later to avoid any further potential drops and the resultant increase in the cost of your transfer.

This week starts relatively quietly on Monday, but Tuesday could well see big movements as BoE Governor Mark Carney talks. And on Wednesday the FED purchase programme could also cause ripples in the market and a movement in rates.
So if you have anything coming up speak to us today for some friendly and professional guidance on how to get the most out of your transfer.

09.00 EUR Various low key Eurozone releases
15.30 USD Dallas FED manufacturing business Index

10.45 GBP BoE Governor Mark Carney Speech
14.00 USD House price index and Markit services

07.00 EUR German consumer confidence
15.00 USD New House sales
19.00 USD Fed purchase programme data and Monetary policy statement
20.00 NZD RBNZ Interest rate decision and statement

09.30 GBP GDP data
13.30 USD Durable goods orders
15.00 USD Pending house sales

03.00 JPY BOJ Interest rate decision
10.00 EUR CPI data
13.30 USD GDP data