Pound vs Euro at 4 month high

Good Morning. As usual for a Monday, we’ll have a detailed look at the economic data releases of the week, and how this may affect rates. Sterling has already risen this morning. More on that in a moment, first a snapshot of rates @ 09:30am:

  • GBP/EUR 1.1369
  • GBP/USD 1.6339
  • GBP/AUD 1.7687
  • GBP/NZD 2.2184
  • GBP/CAD 1.6797
  • GBP/CHF 1.6763
  • GBP/ZAR 12.085
  • GBP/JPY 148.56
  • GBP/JPY 148.55
  • EUR/USD 1.4366

Pound gains on Monday
Sterling extended gains this morning after a great week last week, due to better than expected house price data early this morning. Sterling is now at a 4 month high against the Euro.The reasons are two fold; first the Euro has been dented by concerns about Greece’s fiscal health while strong UK housing data this morning has boosted the pound.

A survey by UK property website Rightmove pointed to a solid recovery in the housing market, showing property asking prices in England and Wales up 0.4 percent month-on-month in January, taking the annual rise to 4.1 percent. The forecast figures were -2.2% and +1.7% – so, the much better than forecast results give more confidence to investors looking at the UK. This then spurs investment into Sterling, and the net result is a stronger currency and better exchange rates.

With continued fears over our debt levels and low interest rates, this could well be short lived. If you are concerned about rates falling, then you should lock levels in now with a Forward Contract.

This Weeks Data
This Week has some significant data from the UK, EU and USA. Monday is a US market Holiday and Banks will be closed due to Martin L. King’s Birthday bank holiday. We have already had much better than expected UK house price data that’s pushed up Sterling.

For the UK in the rest of the week, we have some inflationary measures on Tuesday, and unemployment data on Wednesday along with the Bank of England minutes. The minutes are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. If the BoE is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the GBP.

In the EU, we have the monthly ECB report that contains a detailed analysis of the prevailing economic situation and the risks to price stability. It also provides articles on a wide range of topics related to the tasks of the ECB. A high reading anticipates a hawkish attitude which will be positive, or bullish, for the EUR, while a low reading is seen as negative, or bearish.

in the USA, there are various unemployment measures, along with inflationary measures such as the Producer Price Index. This measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Changes in the PPI are widely followed as an indicator of commodity inflation. A high reading is seen as positive (or bullish) for the USD, whereas a low reading is seen as negative (or bearish).

Elsewhere we have an interest rate decision for Canada, and Retail Sales and inflation data for New Zealand.

For detailed information on how the data releases below can affect currency exchange rates, and how you can protect yourself against adverse rate movements, contact us today.

UK House Prices
US Holiday Today

UK – Consumer Price Index
UK – Retail Price Index
Ger – ZEW Index
Can – Interest Rate Decision
NZ – Consumer Price Index

Ger – Producer Price Index
UK – Average Earnings
UK – Bank of England Minutes
UK – Unemployment
UK – Jobless Claims
US – Producer Price Index
NZ – Retail Sales

EU – ECB Monthly Report
UK – Mortgage Approvals
UK – CBI Industrial Trends
US – Jobless Claims

Ger – Purchasing Managers Index
EU – Purchasing Managers Index
UK – Retail Sales
Can – Retail Sales

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