Will the Pound struggle continue

22 May, 2017

Ashley Finill

Last week saw a struggle for the Pound as it lost over 2 cents on the Euro. Sterling had been on a fairly good run since the snap election was announced, but the rally has been halted and now reversed.

With the election only a couple of weeks away, this could be a testing time for Sterling, it would be expected that a Theresa May victory could be already priced into the market, so the rates aren’t likely to react if she wins. For example should it not be so one-sided as expected Sterling could potentially continue to falter against the Euro. It is not only the election here in the UK to be on look out for as the European Central Bank are in talks of tapering their QE programme. If this were to be the case, the Euro would gain strength from this, and again the loser will be Sterling.

If you have a requirement to purchase Euros, although as of late the rates have not gone in your favour, it is worth remembering that we are still currently trading around 2/3 cents better than the start of the year. With future events set to shake up the markets, it may be prudent if you aren’t much of a gambler to avoid the risk of a sterling crash and to get something in place. Speak to your account manager here for friendly guidance and to be kept up to date with what is happening.

This week there is not a mass amount of major data to be released so this week is more than likely to be sentiment-driven which again is heavy with the Euro. The few bits of data to look out this week which is likely to create some volatility are the UK inflation report hearing on Tuesday morning, FOMC minutes in the US on Wednesday afternoon. UK GDP figures on Thursday morning and again in the US with Durable goods on Friday afternoon. Here is a list below of all the data releases this week.

12.30 – US – Chicago Fed National Activity Index

06.00 – EUR – Gross Domestic Product
08.00 – EUR – IFO Expectations, Current assessment & Business climate
08.00 – EUR – Markit Manufacturing, Services & PMI composite
08.30 – GBP – Public sector net borrowing
09.00 – EUR – EU Financial stability review
10.00 – GBP – Inflation report hearings
13.45 – USD – Markit manufacturing, services & PMI composite
14.00 – USD – New home sales
22.45 – NZD – Exports, Imports & Trade Balance

00.00 – JPY – Bank of Japan governor Kuroda Speech
06.00 – EUR – Gfk consumer confidence survey
07.15 – CHF – Industrial production
13.00 – USD – Housing price index
14.00 – CAD – BOC rate statement & interest rate decision
23.50 – JPY – Foreign investment in stocks and bond investment

All day – USD – OPEC meeting
02.00 – NZD – Budget release
08.30 – GBP – Gross domestic product
12.30 – USD – Initial jobless claims
23.30 – JPY – National CPI

12.30 – USD – Gross domestic product, personal consumption expenditures
12.30 – USD – Durable goods orders