Monday 21st July 2014
The Pound fell a little towards the end of last week, as worries about the tensions between Russia and the West in Ukraine meant that investors sought out safe haven currencies. When there is global uncertainty, it often causes ‘safe-haven’ currencies like the US Dollar to strengthen as international investors move out of riskier currencies, like the Pound. This is the main reason for the slip from the recent highs we have recently seen.
Sterling has surged over the past year as Britain’s economy has shown signs of a strengthening recovery, fuelling expectations that the BoE will hike interest rates before the year’s end. In contrast the EU economy is faltering and they are likely to pursue stimulus measures which have weakened the Euro.
Despite this, in recent months the Pound gets to levels in the €1.26’s against the Euro and the $1.71’s against the Dollar before dropping back away. Given Sterling can’t seem to sustain its gains, now is a good time to take stock of your currency needs.
To discuss how I can help you get the best exchange rates, or to simply have a chat with a currency expert to talk about which way the rate may move, get in touch with me for a free consultation. I can discuss the currency you need to buy or sell, explain what could move the rate and help you to decide when to fix your exchange rates. When the time comes, I can provide you a quote to compare with your bank or existing broker, and even a small improvement could save you thousands when converting a large sum.
This week’s economic data releases
What causes exchange rates to move?
There are 4 main things – economic data releases, political events, natural disasters and uncertainty caused by war. Most of things are impossible to foresee, such as the current crisis in Gaza and Ukraine which could cause investors to seek safe haven currencies such as the US Dollar.
What is known in advance are economic data releases. I have listed below the coming weeks scheduled releases that could affect exchange rates. For more detailed information on how these could affect the exchange rate you are interested in, contact me for a free consultation.
Tuesday 22nd July 2014
There are no UK releases today. In Australia we have a speech by the RBA governor so there may be some volatility for GBP/AUD rates. Other than that all data is from the USA – Inflation numbers and Home Sales.
Wednesday 23rd July 2014
Today could be interesting for the Pound, as we have the latest Bank of England minutes, showing what was discussed and how they voted in their recent decision to hold interest rates. There could be clues as to when UK interest rates may rise which could affect Sterling.
In the Eurozone we see Consumer confidence figures and over in New Zealand we have their latest interest rate decision and Trade Balance figures. I think they may raise interest rates which would cause GBP/NZD to fall.
Thursday 24th July 2014 UK
Retail Sales numbers are released this morning, which are a good barometer of overall economic activity and so could affect the Pound. In the EU we have some inflation numbers. In the USA the latest jobless numbers and home sales figures are released, in addition to manufacturing PMI figures.
Friday 25th July 2014
UK Gross Domestic Product (GDP) numbers are released this morning. The expected figure is 3.1% – any higher and the Pound could rise, any lower and it could fall.
In the USA we have Durable goods orders which often involve large investments which are sensitive to the US economic situation, so this release could cause some volatility in GBP/USD rates.