Good morning. The pound remains strong this morning, but where may rates move this week? Lets have a look at what's been happening in the markets, and this weeks events that could cause further volatility. First, the usual snapshot of rates as at 09:00am 28th June 2010:
In the emergency budget Osborne revised down growth forecasts for 2010 and warned that unemployment would reach 8.1%. Strength for
The only other positive remaining event for sterling last week was the Bank of England minutes that revealed a surprise 7-1 voted on interest rates. MPC member Andrew Sentance voted for a rate hike. Sentance also went on the say that he felt despite current uncertainties it was appropriate to begin to withdraw gradually some of the exceptional monetary stimulus. The minutes boosted
In the coming week markets will open to the G20 meeting, although the likelihood of a definitive statement addressing the European debt crisis is unlikely, a lack of unity could unsettle the markets and allow for safe haven buying into the dollar.
With Market confidence restored after last week’s budget announcement and the commitment from the UK government to take aggressive measures to reduce Britain’s deficit, Analysts are now concerned that the lower spending power could have a negative impact on growth and as such could cause further volatility for Sterling.
Former BoE member Blanchflower, recently warned of the possibility for a double-dip recession in the
This Weeks Data
The weekends G20 meeting will likely have an impact this week, as the EU debt crisis was the focus of discussions over the weekend. Last week we hit a 19 month high against the Euro and a 6 week high against the US Dollar. Any announcements could cause volatility in rates.
If a clear plan is agreed to assist the EU that appeases the markets, the currency could strengthen and GBP/EUR rates could fall back away. If however no clear plan is agreed, and investors remain wary of investing in the Eurozone, we could see the Euro continue to remain weak and good buying levels remain.
The main fundamental data for the week is as follows:
Monday
Inflation data from
Tuesday
Today is all about confidence, and the focus is on the EU. We have consumer confidence, industrial confidence, Economic confidence and services confidence. Basically, if the measures show they are confident then the Euro may gain. There’s not much to be confident about in the EU at the moment, but developments from the G20 meeting may change this. Later in the day we have
Wednesday
More significant data today – from the
Thursday
Inflation data is the only
Friday
Producer Prices from the EU will give an indication of future interest rate movements in the
If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.
If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.