Market flat amidst few currency data releases
24 October, 2017
Yesterday was a particularly flat day in the currency market in what was a day with very few currency data releases. As a result, the major pairings of GBP, EUR and USD all remained flat and closed close to where they had opened the day’s trading.
Today is much busier in the way of data, although there are still no releases of major note. The morning kicks off with Eurozone Markit service and manufacturing PMI, whilst in the afternoon focus shifts to the US who release the same Ecostats themselves, alongside the Redbook index and the Richmond Fed Manufacturing Index. With no data from the UK will we see another flat day of trading or could USD/EUR cause some pressure and some movement? And with Brexit negotiations in the news daily could further reports of failing negotiations cause the Pound to struggle?
UK interest rate hike looming?
Many of you will have seen in the news recently speculation about a potential hike in UK interest rates, which of course is of major importance as it can affect the rate significantly.
Readers may like to take note therefore that the Bank of England meet next week on the 2nd November and will decide as to whether to hike. Following the inflation reading of 3% last week many thought this would mean it was all but guaranteed. However, Euro buyers beware that following BoE governor Mark Carneys dovish comments to the select committee afterwards this may not be the case. His comments seemed to suggest he was perhaps not 100% convinced of a hike so soon, and consequently, the rate fell back by a couple of cents.
Certainly, if we see a hike in rates would improve but this is not guaranteed for next week, and as such, no hike could see the rate drop back again. Those of you holding out may like to consider this alongside Carney’s stance, in case we do see the rate trickle back should no hike be announced.
Equally Euro sellers out there would be wise to consider the current position. Although we are unlikely to see a hike next week, the likelihood we will in the next 6 months is still very high, and any hint may see the rate push up and therefore against you.
If you have any upcoming Euro sell requirements, speak to your Currency Index broker today about our Forward contract options. This allows you to fix the exchange rate for the future, thereby protecting it against potential rises we may see in the coming months – a very popular option at present.
Currency Index can help you stay well informed and well ahead of the market. Should you have any upcoming requirements give us a call today and let us provide you with some friendly and professional guidance on how to get this most out of your transfer in what is a volatile market in uncertain times.
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