Last run on the currency markets for the month

27 August, 2013

Tom Arnold

As we come to the end of the summer season, with activity across the markets expected to pick up again once we hit September, we have this week what can only be described as the lull before the storm data wise across the currency markets. In the UK we have an almost complete absence of any data of note – consumer confidence figures on Thursday and house price and mortgage approvals on Friday are the only things worth watching for, although none are likely to be big market movers. There is the possibility of some fireworks tomorrow when new Bank of England governor Mark Carney speaks before Parliament, but given his predilection for “forward guidance” and therefore the markets having a reasonably good idea what his plans are, I am not sure this will cause many waves either. Europe is due for a busier week with its largest economy – Germany – releasing a raft of data as the week progresses – important business survey data is due this morning, consumer confidence figures tomorrow, unemployment and inflation on Thursday and retail sales on Friday. All could be critical market movers, as the German economy is so dominant in Europe that what happens there generally guides market sentiment across the whole zone. There has been a distinct upturn in analyst’s sentiment toward Europe, particularly following their recent move out of recession, and as such some good data is likely here and could strengthen the Euro, making it more expensive for all of those of you sending money to Europe. As with the UK, there is not a huge amount of US data due this week, with the highlight most definitely GDP on Thursday. There is also consumer confidence figures today, house sales numbers tomorrow, some jobs numbers on Thursday and various personal consumption and spending figures on Friday, but none of this is likely to be too critical. Watch for GDP and also how things progress in Syria as the week moves ahead – the US seems to be edging towards a military intervention following the suspected chemical attack last week, and with Iran making threats if this were to happen, market risk appetite is likely to fall through the floor, and oil prices could shoot up again, all of which could have a significant effect on the US Dollar. As usual please stay in close touch with your CI account manager to be kept well informed on what is happening and how it could affect the timing of your currency purchase and your decision to send money abroad.