Pound largely unchanged after Christmas break.

Good Morning and welcome back after the Christmas break. Exchange rates are much as they were before the break, with GBP/USD rates slightly up, and GBP/EUR pretty much unchanged. Rates @ 08:30am are as follows:

  • GBP/EUR 1.1126
  • GBP/USD 1.6058
  • GBP/AUD 1.7974
  • GBP/NZD 2.2543
  • GBP/CAD 1.6717
  • GBP/CHF 1.6532
  • GBP/ZAR 11.947
  • GBP/JPY 147.03
  • EUR/USD 1.4428

Sterling has been weighed down this week since a disappointing revision to third quarter UK growth figures, and as minutes from the latest Bank of England policy meeting were perceived as leaving the door open to further monetary easing.

“Sentiment towards sterling is still overwhelmingly negative. If there are any crowded trades out there it’s that people are very short of sterling,” said Adam Cole, global head of FX strategy at RBC Capital Markets.

It is difficult to see any catalyst for any correction, even though sterling is historically very cheap at the moment.

This Weeks Data
It’s a quiet week for data releases due to the short week. The only data of note for the UK is the nationwide House prices on Thursday. This shows the value of the houses prices in UK and indicate current movements in the housing market that is considered as a sensitive factor to the UK’s economy, and so can have an impact on the value of Sterling.

For the EU we have Consumer Price Index for Germany. This measures the average price change for all goods and services purchased by households for consumption purposes. CPI is the main indicator to measure inflation and changes in purchasing trends. A high reading is positive (or Bullish) for the EUR, while a low reading is negative (or bearish).

Elsewhere, there is a measure of Jobless claims from the US. This is a measure of the number of people filing first-time claims for state unemployment insurance. In other words, it provides a measure of strength in the labor market. A larger than expected number indicates weakness in this market which influences the strength and direction of the US economy.

With little data, and worldwide trading volumes much thinner than usual, surprises in the data below could cause bigger swings than usual in exchange rates. Get in touch with us today to discuss the implications of this on your particular currency requirement.

Tuesday
Ger – Consumer Price Index
US – Consumer Confidence

Wednesday
US – Crude Oil Stocks Change
US – Purchasing Managers Index

Thursday
UK – Nationwide House Prices
US – Jobless Claims

Friday
Holiday

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