Key events in the pipeline for currency majors

29 November, 2016

Rob Bastin

As November draws to an end the economic calendar gets thinner on key data releases, awaiting the inevitable volatility that the new month will bring on Thursday. With no data released yesterday, Sterling slipped further from last week’s highs, a drop was aided by a morning announcement from the OECD (Organisation for Economic Co-Operation and Development) who has forecast that the UK will have one of the lowest growth rates of any G20 country within the next 2 years, falling to 1.2% next year and just 1% in 2018. Both these forecasts are worse than those of the Bank of England and the Office for Budget Responsibility, although all 3 are unified in expected a tough road ahead for economic growth.

Across the pond the US markets also saw a correction on the recent surge in the greenback and in US Stocks since the surprise victory of President-elect Donald Trump. After news over the weekend that money is being raised to pursue a recount in 3 states, Wisconsin, Pennsylvania and Michigan as overturning the vote in these states would be enough to tilt the result back to Hilary Clinton. Once again trump reacted to this via social media claiming that he would still have won the popular vote if all the ‘illegal’ votes for Clinton had been removed, a claim that has been seen as somewhat fictional and without any evidence to back it up.

The last 2 weeks have seen a huge market shift in the major currencies since Trump’s victory and many of our clients have benefitted from the weaker Euro when buying their overseas property. The future however is still very uncertain so expectation of these rates continuing to improve must be balanced with the reality of upcoming risks. How will Italy vote in their constitutional vote on Sunday? How will the high court rule on Article 50 next Monday? Will Trump ever actually make it to the White House? With so much uncertainty ahead, those of you who prefer not to gamble with your life savings may wish to consider locking in the current peak rates we are experiencing ahead of a busy week for the Uk, Euro-zone and USA. This afternoon we have one key announcement for the US with their revised Q3 growth figures, expected to be improved top 3% on the year from 2.9% last month.