Pound makes small gains against the Euro

Last week was a fairly uneventful one for the currency markets with little data out for the UK for much of the week to make any big changes, although we did see the Pound makes small gains against the Euro, with improvements towards the end of the week. The Pound moved to a 10 day high making small gains against the Euro following better than expected UK Manufacturing PMI posting at 56.9, better than the predicted 55.0. This upward move was also helped by a negative result for US Nonfarm payroll which was down by 24k for the month of August.

This past week the focus has also turned back to Brexit negotiations which seemed to be hitting headlines over the weekend, following reports of mounting criticisms that divorce talks have not been as smooth as originally hoped. After returning from the third round of exit talks in Brussels, Brexit secretary David Davis had said during a conference that “some concrete progress” had been made, only for Michel Barnier to contradict with comments that “no decisive progress” on the key issues of the divorce bill had been made. – http://news.sky.com/story/brexit-secretary-david-davis-expects-government-to-last-five-years-11015962

In terms of currency, the Pound needs to see some positive reports for a Brexit deal to avoid investors confidence slipping over uncertainty.

A new month brings with it new economic stats which as ever have the potential to sway rates. Following positive Manufacturing PMI last week investors will be watching to see if the results from the construction and services industry due on Monday and Tuesday will show similar results.

Currency news this week

This is what the week ahead looks like:

Monday

09:30 GBP Construction PMI
10:00 EUR Producer Price Index (July)

Tuesday

Overnight AUD Interest Rate Decision & Statement
09:00 EUR Markit Services PMI
09:30 GBP Markit Service PMI
11:00 GBP Inflation Report Hearings
11:00 EUR Retail Sales (July)
15:00 USD Factory Orders

Wednesday

Overnight AUD GDP Release
13:30 USD Trade Balance
14:45 USD Markit Services PMI
15:00 USD ISM Non-Manufacturing PMI
16:00 CAD Bank of Canada Rate Decision & Statement

Thursday

Overnight AUD Retail Sales, Trade Balance, Imports & Exports
10:00 EUR GDP Release
12:45 EUR Interest Rate Decision
13:30 USD Continuing & Initial Jobless Claim, Unit Labour Costs & Non Farm Productivity
13:30 EUR ECB Monetary Policy Statement & Press Conference.
15:00 CAD Ivey Purchasing Managers

Friday

09:30 GBP Consumer Inflation Expectations, Manufacturing/Industrial Production, & Trade Balance
13:00 GBP NIESR GDP Estimate (Aug)
13:30 CAD Unemployment Rate, Participation Rate & Net Change in Employment

If you are due to complete on an upcoming property purchase or have sterling in hand and need to buy currency in the coming weeks this current levels may be your best chance to catch the rates while experiencing this spike. The market is still set on a downward trend and it is easy to get caught in the trap of thinking that rates will continue to improve. If you are concerned then give us a call today on 01923 725 725 and speak to one of our friendly currency brokers.