UK Wage Growth, and other data that could move exchange rates this week

Good morning. Our 2 most commonly traded pairs (GBP/EUR and GBP/USD) are still riding high. Pound/Euro is sat at €1.1350 which is close to a 6 week high. Pound/Dollar is at $1.39 which is the best we’ve seen Dollar rates since the EU referendum.

This week there are some key events that could move major currencies such as Sterling or the Euro. Below I’ve outlined the main events for the coming week. If you would like a free consultation on the currency you need to buy, and get a quote on the rate we can offer, send an enquiry or drop me an email.

This week’s economic data releases 

Monday 22nd January 2018 – There are no major releases from the UK or EU today, so unless there’s any Brexit announcements then it’s likely rates will remain above €1.13. Pound/Dollar could be affected however due to the US government shutdown.

Tuesday 23rd January 2018 – There are no major releases from the UK today, however in Europe we’ll see German and EU measures of Economic Sentiment and Consumer Confidence.

Wednesday 24th January 2018 – Today is where it gets interesting Starting in Europe we see a raft of inflationary measures. These results will have an impact on whether the ECB start to end their monetary stimulus measures and amend their interest rates this year. Strong readings would strengthen the Euro and pull GBP/EUR lower. Poor readings however would weaken the single currency and could push Pound/Euro rates towards €1.14.

Also impacting GBP/EUR will be the latest round of UK jobs data. Unemployment is at a record low at the moment, but wage growth has been sluggish which is holding the BoE back from raising interest rates. If wage growth starts to growth  and get closer to the underlying inflation rate, then I expect the Pound to gain. The number is expected at 2.5% so if it matches or exceeds this, expect Sterling to gain.

Thursday 25th January 2018 – Today the European Central Bank will announce their latest decision on interest rates and monetary policy. Of late there have been rumours that despite an improving economy, they may continue their policy of monetary stimulus. If this is confirmed then the Euro may weaken and push GBP/EUR higher. If however their comments are hawkish and upbeat and signal that stimulus may come to an end this year, then expect the Euro to strengthen, and pull Pound/Euro rates lower. This is a very important day for anyone looking to buy or sell Euros.

Friday 26th January 2018 – We end the week with the latest GDP numbers for the UK. I expect 0.4% quarterly growth. If the results are higher or lower than this figure, then Sterling will rise or fall accordingly. Elsewhere there is a speech by an ECB member and also a speech by the BoE governor Mark Carney. These both have the potential to move Pound/Euro rates. Over in Canada there are various inflationary measures that could move GBPCAD.

Looking for the best currency exchange rates?

If you would like to get a free quote, or simply have a chat with an expert about which way the market is moving, contact us today for a free consultation. Alternatively you can send me an email directly.

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