Weekly Market Update

Last week’s trading was another torrid week for the Euro that lost 4 cents to both the USD and GBP at its peaks. Pressure continues to weigh on the single currency with fresh concerns over the Greek negotiations and with the USD coming back into its peak strength ahead of potential rates rises this year. EUR/USD continues to capitulate with many forecasting it go another 5% this year having already dropped over 10% since January. These forecasts have led to speculation that GBP/EUR is heading towards 1.50 at some point this year which could yet be possible, but having gained 10% already in 3 months it is very likely that the short term peak has now been reached.

GBP/EUR dropped 3 cents from Wednesday lunch time to Friday lunchtime the biggest drop this year and a strong sign that markets are ready to take their profits and push rates lower in the coming weeks. This drop was aided by comments from the Bank of England that the strong pound against the Euro could have negative effects on interest rate hikes in the UK as if the pound becomes too high it could significantly affect exports to the Euro-zone and subsequently the pace of the recovery. Mark Carney has the power to talk down the rates with such comments and this is just what we saw last week. Anyone holding on for 1.50 anytime soon may wish to reconsider their targets and keep a close on rates dropping back below 1.40.

This week is relatively quiet for major data but the few key releases to watch out for are as below:
Tuesday:
10:00am (EUR) – Consumer Price Index/Unemployment change

Wednesday:
9:30am (UK) – BOE MPC Vote / Average Earning & Unemployment
6:00pm (USD) – Fed interest rate decision & statement

Thursday:
7:00am (CHF) – Swiss Interest Rate Decision
10:15am (EUR) – Targeted LTRO

Friday:
9:30am (UK) – Public Sector Net Borrowing
12:30pm (CAD) – Consumer Price Index

Stay in close contact with your dedicated point of contact at Currency Index, we will keep you informed on market movements and with our bank-beating exchange rates, we will help save you money compared to your bank.