Sterling continues on rocky road

Last week we had some relief for sterling as David Cameron stepped down, making way for Theresa May to start her tenure inside No 10. <br>

The initial feelings towards the pound were positive as we saw gains made across the board, hitting rates not seen since the day the referendum results came in. Some savvy buyers saw this as a good short term opportunity and purchased their required currency, while other more optimistic gambled on this being the start of a sterling come back only to lose the opportunity.  <br>

The Bank of England decided, by a larger than expected majority, to hold fire on any monetary easing by holding interest rates and QE as they were but with the strong hint of something coming in the coming months. Investors took profit for the gains and come the end of the week the pound was trailing across the board again, losing 2.5 cents against the greenback, 1.5 cents against the single currency euro and 2 cents against the Aussie dollar to name a few. With the Eurozone also in a panic, the Euro/Dollar rates also took a hit dropping over a Euro cent.  <br>

With the terror attack in France which yet again stunned the world and an attempted coup in Turkey, these are certainly cautious and uncertain times generally. From a political sense, the U.K. is hoping to now be more stable on that front, able to tackle the economic uncertainty which has been of concern to many of late, formulating a game plan for invoking Article 50 and starting the Brexit process. The Bank of England have been at the fore trying to encourage the doom and gloom merchants out there that the UK will be ready to tackle any issues thrown at us and now we have a new Prime Minister, we should also see steps by the government to help steady the ship but as we have seen in the past week, investor confidence in the pound is still fragile and any hope of a sudden rise in the pounds value seem severely misplaced.  <br>

The list of key events this week is outlined below but the main point of interest is the ECB meeting on Thursday where markets will be keen to hear from president Mario Draghi to get his latest stance on EU monetary policy since the vote for Brexit. In addition to that we have the following: <br>

Monday – overnight we have the Australian RBA meeting minutes <br>

Tuesday – ZEW German economic sentiment and current conditions surveys and a late speech by BoE MPC member Broadbent. <br>

Wednesday- UK unemployment figures and claimant count, the first set since the Brexit vote. <br>

Thursday – UK retail sales data at 9.30am, precedes the ECB interest rate decision and speech by Mario Draghi at lunchtime. <br>

Friday – EU PMI for manufacturing and services followed after lunch by Canadian retail sales <br>

Some key data releases to contend with along with the usual political goings on we have currently so no doubt a busy week once again and some volatile markets to navigate. If you are someone with a currency transfer coming up imminently or you have the benefit of some time to play with, give one of the team at Currency Index a call today to get your plan in place with one of the contract options available to help make the most of it. <br>