Pounds struggles continue little data out this week

7 August, 2017

Matthew Boyle

Last week saw another tough week for the Pound as it lost ground against both the Euro and USD. The big news was on Thursday which saw the Bank of England downgrade the UKs growth forecast, and at the same time the vote from the MPC towards a rate hike change from 3 to 2. As a result, and added with the ongoing Brexit uncertainty this saw the Pound lose further ground, most notably against the single currency, taking it to 8 year lows.

Friday did offer a small bit of respite for GBP>EUR as US non-farm payroll data came in better than expected, strengthening the USD against the Pound. We often see with the see-saw effect between GBP/EUR/USD this in turn saw GBP>EUR rates weaken off slightly with the Pound clawing back 1/3rd of a cent in Fridays afternoon trading.

This week is a quiet week in the way of data, however we do have a few key releases that could move rates- most notably the UK inflation report hearings on Wednesday. Last month we saw UK inflation slow to 2.6% from a predicted 2.9%, and with this heavily linked to a potential interest rate hike, a poor result here could kick a potential hike well into next year and as a result see losses for the Pound. A bad result here combined with last week’s BoE downgrading, and with the Euro very string and sentiment riding with it could see the Pounds woes continue.

It is worth bearing in mind in regard to the see-saw effect, with the Euro so strong (demonstrated by having pushed the USD to a 2 year low) this only lends to add increased pressure to push GBP/EUR down further. Whilst many of you may be shocked at how low rates currently are and many perhaps holding out for a recovery, this is far from certain especially with the Euro continuing to go from strength to strength. With many major banks warning of parity soon those of you holding out may like to consider your position.

Equally those Euro sellers out there might like to take advantage of current rates at an 8 year high in case of course we do see the recovery many are hoping for. Give your Currency Index broker a call today if you have any upcoming requirements. Currency index offers many ways in which you can order currency to help safeguard your purchase in what is currently a volatile and unforgiven market.

07.30 GBP Halifax House price data
14.00 USD Labour Market Conditions
17.25 USD FOMC member Kashkari speech & consumer credit change

06.00 EUR German imports, exports & trade balance
12.00 GBP NIESR GDP estimate

10.00 GBP Inflation report hearings
12.30 USD Labour costs & non-farm productivity
21.00 NZD RBNZ Interest rate decision and monetary policy statement

08.30 GBP Manufacturing & Industrial Production + Trade & goods balance data
12.30 USD Jobless claims data
18.00 USD Monthly Budget statement

06.00 EUR German Inflation data
12.30 USD Inflation data
18.30 USD FOMC Kashkari speech