- Sterling strengthens again after Bank of England statement
- European elections dominate Euro performance
- Disappointing data and rising oil prices weaken the US Dollar
- Chinese Inflation fails to fell commodity currencies
Pound picks up despite mixed signals
Despite the negativity coming from the Bank of England’s UK growth downgrade and the release of lukewarm manufacturing and industrial sector data, the Pound has picked up, following an initial fall. We are expecting Retail Inflation, Employment and Retail Sales data this week, with a mixed bag of forecasts, so there is more volatility in store for Sterling throughout the week. Keep a close eye on the Pound’s performance against its key currency partners over the coming days.
Elections dominate European focus
Election activity is the key focus for Europe and the Euro right now, with the spotlight on Germany. The success of Angela Merkel’s party in North Rhine-Westphalia could be positive for the Euro, as the chance that Merkel will retain her chancellorship could give the Euro and the Eurozone a little confidence boost. Otherwise, there is little data expected this week, except the latest Eurozone Gross Domestic Product (GDP) figures and European Central Bank (ECB) Minutes.
USD-Euro one to watch…
Rising oil prices have taken their toll on the US Dollar, following further oil production restrictions. However, a member of the Federal Reserve hinted that there would be another two interest rate increases in 2017, which served to balance the USD’s fortunes.
There is not a huge amount of data to come out of the US this week, other than Housing and Industrial Production results. The EUR-USD rate will be one to watch over the coming days and weeks.
China and the commodity currencies
The Australian and New Zealand Dollars were largely unaffected by muted Chinese Inflation data, but there will be a number of Australian and New Zealand data releases this week, which may have an impact.
Canadian Dollar could weaken if forecasts correct
Towards the end of this week, we will get the Canadian Retail and Inflation figures, predicted to be poor, and this could have a negative effect on the Canadian Dollar. If you are selling or planning to sell Canadian Dollars, it would be a good time to assess your risk and look to protect your rate by trading before the data is released or making use of a Stop Loss Order or Forward Contract. Speak to your currency consultant for further guidance.