What could move Exchange Rates this week?

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Good morning. In today’s post I’ll take a look at the key economic data releases for the week ahead, and how they could affect Exchange Rates. In addition to the economic data releases listed below, any progress with Brexit negotiations are also likely to have a significant impact on GBP exchange rates. If there continues to be a perceived lack of progress with talks, the Pound could continue to fall. Some reports say that the Pound could drop by 10% should the UK leave with no deal. If however, the EU decide to make some concessions to allow the negotiations to progress, then it’s likely the Pound will recover some of the ground it has lost in recent weeks.

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What data could move exchange rates this week?

Monday 13th August – there is little in the way of economic data today. The Pound is therefore likely to move on any developments with regards to Brexit.

Tuesday 14th August – Today the UK will release its latest unemployment and earnings data. I expect the unemployment rate to remain at its record low of 4.2%. Earnings data will also be in focus. The markets expect earnings to have grown by 2.7% in the last quarter. If the actual number matches or exceeds this, then it could lend some support to the Pound. Elsewhere, Germany and the EU as a whole release their latest GDP numbers, which could also affect Pound/Euro rates.

Wednesday 15th August – At 09:30am we’ll see the latest UK Inflation numbers. Inflation can influence interest rate movements, but given the BoE have already said any further rate hikes will be limited, it might not have much of an effect. There’s also some US data in the afternoon that could affect GBP/USD rates including Retail Sales and Industrial Production numbers.

Thursday 16th August – Today’s key UK release is the 09:30am Retail Sales numbers. They are a very good barometer of how the economy is doing. If the result is better than 0.4% then the Pound could gain, however a disappointing number could easily send the Pound lower. The US releases jobless claims at lunchtime that could move GBP/USD lower.

Friday 17th August – There’s nothing from the UK today, so GBP/EUR rates will be influences by the EU’s inflation numbers at 10am. A higher than expected reading would strengthen the single currency, pulling GBP/EUR rates lower. GBP/CAD will also be in focus as markets react to the latest Canadian inflation figures.

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