Could Pound fall further against the Euro?

Good afternoon.  The Pound hasn’t started the week very well, starting the day in the mid €1.16’s against the Euro, and sitting down at $1.30 vs the US Dollar. Sterling has made about a 0.5% gain so far today, but no significant gains are expected, due to the ongoing uncertainty due to the EU referendum. (Click here for live currency graphs).

There are also rumours that the chancellor Philip Hammond is going to give up access to the single market, in order to impose immigration restrictions. If true this means the government will put immigration ahead of EU market access, which won’t do anything to ease investors’ concerns and will only add to the uncertainty, which could seriously weaken the Pound further.

Hans Redeker, head of currency strategy at Morgan Stanley said that “Things look increasingly messy and with the UK government not defining a clear position concerning its exit strategy uncertainties will remain high. What matters for sterling is the medium-term investment outlook and here the outlook is negative.”  There could be troubled waters ahead for Sterling and this increases the chance of exchange rates falling much further.

This week, I think it could be a fairly quiet one for Sterling, due to a lack of any significant data releases from the UK. However anything unexpected such as further information about our access to the single market could unexpectedly alter the value of the Pound.

Below I’ve listed the main economic releases for the week that could affect GBP/EUR, GBP/USD, GBP/AUD, GBP/NZD and GBP/CAD. If you need to exchange currency and would like to get a quote, or simply discuss with me forecasts for the currency pair you’re looking at, click here to send me a free enquiry today.

This week’s data releases that could affect exchange rates

Tuesday 20th September – There’s no data of note from the UK, and the only thing on the agenda that could affect GBP/EUR rates is Inflation figures from Germany, Europe’s largest economy. From the US we have Housing data. Australia also releases housing data, along with the minutes to their latest policy decision. This could have an impact on any clients looking at GBP/AUD.

Wednesday 21st September – Public sector net borrowing figures are released from the UK today, expected to show a deficit of £10.3bn. If the number differs from this forecast, expect Sterling exchange rates to be affected. The most important release today however is the eagerly anticipated interest rate decision from the Federal Reserve. The US is expected to raise rates at some point this year, but I don’t think it will happen today. Any hints of a hike later in the year however would likely send GBP/USD lower. There is also an interest rate decision from New Zealand today that could affect GBP/NZD rates.

Thursday 22nd September – A quiet day again for the UK with no releases of note. However the ECB president Mario Draghi is giving a speech. The last time he spoke, his comments caused GBP/EUR rates to drop sharply as their positive tone strengthened the Euro. An economic bulletin is also released today from the EU. Elsewhere, US jobless claims could move GBP/USD rates.

Friday 23rd September – Another quiet day for Britain, but Europe releases a range of inflationary measures that could cause the single currency to change in value. There’s also a speech by an RBA member from Australia that could change GBP/AUD. Canada also releases inflation figures today that could alter GBP/CAD exchange rates.

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