What could impact GBP, USD, EUR and AUD exchange rates this week?

Sterling exchange rates have once again started on the back foot against most major currencies. As we start the working week the pound opened at 1.1176 against the euro, 1.2745 against the USD and 1.7423 against the AUD. Below I have outlined what data sets could impact the pound this week.

Monday 20th – the trading week has started very slowly with no UK or US data of note. Those that have an interest in the Australian Dollar may want to keep an eye on a speech this evening from the Reserve Bank of Australia (RBA) Governor Philip Lowe.

Tuesday 21st – look out for UK public sector net borrowing data at 09:30. This captures an amount of new debt held by the UK government. The wider the gap generally the worse for the pound. There is no US data of note.

Wednesday 22nd – overnight there is a scheduled speech from RBA assistant governor Guy Debelle. Again nothing expected but worth keeping an on for any clues as to future RBA monetary policy. Today’s main release will be in the form of the FOMC (Federal Open Market Committee) minutes from the last interest decision held by the Fed. The money markets are pricing in another two interest rate hikes between now and the end of the year. These minutes may go some way to confirming these thoughts and lend to further US dollar strength.

Thursday 23rd – again very quiet for the pound but plenty of data from across the pound and the euro zone. The morning is heavy from EUR data starting with markit manufacturing and services PMI at 09:00. This is followed by the ECB (European Central Bank) policy meetings account giving an overview of financial market and economic developments.

Thursday afternoon is dominated by US data with markit manufacturing and services PMI at 14:45 and initial jobless claims at 13:30.

Friday 24th – a quiet end to the week but look out for the mortgage approvals from the UK and a speech from Fed chair Jerome Powell at 15:00

This week is set to be relatively quiet fro the pound meaning most of sterling’s movements will be dominated by events elsewhere. I would expect the pound to continue to trade in a tight range against the euro, sitting between 1.1150 and 12 for the foreseeable. As for GBP/USD I would expect the pound to remain under pressure, particularly as the US dollar continues to receive inflows following the situation in Turkey. This pair could easily move towards 1.25 and beyond.

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