Will the Pound go up or down this week?
What many clients want to know, is will the Pound go up or down this week. The Pound is still under pressure and will remain so until we get some sort of clarity with Brexit. There is unlikely to be any progress with Brexit for at least a month, while we wait to see who will be the new Prime Minister. Exchange rates will still fluctuate however, and Sterling will find direction from economic data releases. With no Brexit news expected until next month at the earliest, read on below for an outline of this week’s data releases, and how they could affect exchange rates.
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This week’s economic data releases
Monday 1st July
There has already been a raft of UK data this morning, which was all worse than expected. Mortgage approvals, Consumer Credit and Manufacturing numbers all came in below forecast This sent Sterling lower. The EU posted slightly better than expected jobs numbers, helping to strengthen the Euro. Later today we have Manufacturing numbers from the USA that could move the GBP/USD rate.
Tuesday 2nd July
From the UK today we will see the latest House Price data from Nationwide. The BoE Governor Mark Carney gives a speech at 3pm, and his comments can often cause volatility for the Pound. Elsewhere, GBP/EUR could move on the latest EU data. This data includes: Inflation numbers and Retail Sales from Germany. Those clients looking at GBP/USD should watch out for speeches by FED members – any hint of an interest rate cut in the US would push cable higher.
Wednesday 3rd July
UK Services PMI and a BoE Speech are the only UK releases today. Europe also has various inflationary numbers that could move the Pound/Euro rate. Over in the USA we have Trade balance figures, Jobless numbers, and inflation. If the results beat forecast, expect GBP/USD to drop, and vice versa.
Thursday 4th July
US markets are closed for Independence Day, so trade will be thinner than usual. There’s nothing from the UK either, so the only focus will be EU retail sales, expected to show +0.4% growth month on month. As always, a higher figure will strengthen the Euro, while a lower one would weaken the single currency, causing the GBP/EUR rate to rise.
Friday 5th July
We finish the week in the UK with Halifax House prices at 08:30am. Most focus will be on the lunchtime jobs numbers from the United States. The Non-Farm payroll number in particular is notoriously difficult to forecast. At the moment the market expects 158,000 new jobs to have been created. The result is often very different and so a higher number would strengthen the USD, and a lower number would weaken it.
This can also affect Pound/Euro rates, because there is an inverse relationship between the USD and EUR. A good US jobs number could therefore cause the Pound/Euro rate to rise, because as the USD strengthens the Euro would weaken, and become cheaper to purchase.
Looking for the best exchange rates?
If you need to get the best rates of exchange, then ee can help explain what is moving the market, so that you can make an informed choice on when to fix a rate. We can also provide you with a free no obligation quote. We often show savings of thousands of Pounds for our clients, so to find out how much you could save, get in touch today.