Majors trend continues– concerns for Euro buyers in short term

26 March, 2015

Matthew Boyle

The trading week so far has seen a continuation of trend as the USD lost further ground also allowing EUR to continue to claw back ground. Monday saw a relatively quiet start to the week and as such it was largely last week’s sentiment and the major news of a delay in US interest rate hikes that dominated the movement in the markets for the majors.

Tuesday was busier with the main releases of data being inflation from both the UK and US. With news that UK inflation was at its lowest since records began it spelt trouble for GBP which began to lose ground across the board – unsurprising given that inflation is heavily linked with any rise in UK interest rates. Across the pond the US posted a positive result (alongside other positive results for new housing data) which gave it some breathing space at least against the weak pound. However this was relatively short-lived as yesterday we saw poor durable goods orders data for USD which once again pushed weakness for to the greenback losing around a cent against both the single currency and  the pound throughout the day’s trading. Yesterdays winner was the Euro then, gaining further against the pound and aided by positive business climate data in the Eurozone, whose gains was not halted by a positive increase in UK mortgage approvals.

So at present it would seem that it is more of the same for the majors in terms of trend, and in the short term the pound seems the weakest of the 3. Unsettling news for any GBP>EUR buyers particularly given the current weak USD, as we are potentially set for further losses in the coming weeks. So make sure you stay in close contact with your C.I broker should you have any upcoming requirements to help protect you against further potential losses.

Today will be an interesting day as we see a raft of data for GBP, EUR and USD – most notably German consumer confidence, UK retail sales and US jobless claims. So once again we will see a three-way head to head as GBP struggles to regain strength, USD seems unsure really which way it is headed amidst interest rate delays, whilst all the time EUR seems to be heavily benefiting in the short term.

Elsewhere of interest we have the Bank of Canada Governor Poloz speech for those of you with requirements to send money to Canada, and late in the evening inflation data from the Bank of Japan for those potentially needing JPY. However whilst the data of note for the day comes from elsewhere in the world the focus largely stays with the majors as the 3-way tussle continues.