Key week ahead for Pound

Headlines this week are likely to be focused on the European Council meeting on Thursday, at which David Cameron will attempt to get all 28 EU leaders to agree on membership reforms, paving the way for a June in/out referendum on Britain’s EU membership.

If a deal is agreed, we might expect to see the Pound weaken further, as we enter a period of uncertainty between now and polling day. However, the next 3 days will be busy with tense final negotiations, as the agreement still contains “lots of square brackets, blanks and unclear language” as Foreign Secretary Philip Hammond has pointed out.

We also have important economic data releases this week in the form of inflation, unemployment and retail sales, so we are likely to see a volatile week for sterling one way or another. If you are worried about the referendum hurting sterling further, look for any opportunities to secure your exchange rate before Thursday’s meeting.

Rates improve
The Pound ended last week with a slight recovery against both the Euro and US Dollar, despite better than expected figures from the Eurozone (GDP) and USA (retail sales). Sterling however is only just above 14-month lows against the Euro, while rates have recovered against the US Dollar due to Federal Reserve Chariman Janet Yellen pouring cold water on expectations of US interest rate hikes last week, so both rate improvements could well be short lived.

Other important data due out this week is shown below. To check on the latest news and views on rates, check our blog article published each morning, or call one of the team at Currency Index on 0800 043 2623 / 01923 725725.

UK
Consumer Inflation (Tuesday, 9.30am)
Unemployment (Wednesday, 9,30am)
Retail Sales (Friday, 9.30am)

Eurozone
Trade Balance (today, 10am)
ECB President Draghi Speech (today, 1pm)
Construction Output (Wednesday, 10am)
Current Account (Thursday, 9am)
European Council Meeting (Thursday, all day)

USA
Federal Reserve minutes (Wednesday, 7pm)
Jobless Claims (Thursday, 1.30pm)
Consumer Inflation (Friday, 1.30pm)