Monday, 29 November 2010

What next for GBP/EUR rates in November ?

What next for GBP/EUR rates in November ?

The market last week has been characterised by range-bound trading, thin liquidity and a loss of risk appetite from investors nervous of a stuttering UK recovery. The exchange rate last week opened 1.167 to a close of 1.18……

Early in the week there was selling pressure on the Euro as investors wanted to see if Ireland accepted the rescue package and what affect this would have on the wider Euro economy and particularly any anticipated contagion to the “sick men of Europe”.

This resulted in a strong Sterling outlook resulting in 2 month high on Weds. However, gains were relatively soft as general consensus was that a Euro safety net lending capacity had been established for the weakest Euro economies and that lending would be accompanied by Euro currency buying by their central banks.

At home confidence in the pound was generally weak as eyes turned to Monetary Policy Committee’s (MPC) stance on Quantitative Easing (QE), Thursday’s inflation report hearing by the Treasury Support Committee (TSC) and the Q3 GDP report on Wednesday.

There were also tensions in Korea, which generally subdued global markets and the US holiday Thursday saw a quiet week with uncertainty the overriding feature. Below we list the main data that could affect rates this week, in the wake of the weekends developments regards Irelands bailout.

Mutability is our tragedy but also our hope”

Weekly Data:
Below we list the main data releases for the week that may impact on Sterling exchange rates. Over the last week it was developments in the Eurozone that dominated the markets and moved currency rates, so to make sure you are kept up to date with what’s happening in the market contact us today for a free consultation.

Knowing which currency you need to buy or sell, including the volumes and timescales, we can then let you know the options available to ensure your currency doesn’t cost more than necessary.

Over the course of the last month, buying €150,000.00 at the high compared to the low would have saved you nearly £8000.00 – clearly illustrating the importance of arming yourself with the necessary knowledge to help you make the decision on which type of contract to use, and when to fix your rate.

Take advantage of the wealth of experience we have here at FCG; register a free trading facility now and take the first step to making the most of your currency.

Monday
From the UK today we will see House price data and Mortgage approvals, giving an idea how this sector is performing. At midnight Consumer Confidence figures are released for the UK. From the EU there are also various confidence measures released. These are forecast to be low anyway, but if they are different than forecast expect volatility in GBP/EUR rates.

Tuesday
Nationwide Housing Prices are released which is the only UK data of note today. From the EU we have Unemployment figures from the EU and Germany. Confidence data from the US in addition to Canadian GDP is the main data from the Americas.

Wednesday
We start the day with Gross Domestic Product (GDP) data from Australia. We expect a 0.5% quarterly gain, but if it’s more than this GBP/AUD rates may fall. From the UK, inflation data will be closely watched as an indicator of what the Bank of England may do at their next interest rate meeting. WE also have inflation data for the EU so expect GBP/EUR volatility today. From the US, the main release is Construction and manufacturing data.

Thursday
A very important day today with some key releases that will affect rates. From the EU, we have GDP figures and an interest rate decision. Given the turmoil in the Eurozone at the moment these will be closely watched by the markets. From the US there are various jobless measures.

Friday
We end the week with some Housing data for the UK. From Europe today we have German Retail Sales and some more inflation figures from the EU. From the US we have Non-farm payrolls that measures how many people are employed outside the agricultural sector (as this is seasonal). These are notoriously difficult to forecast, and so the numbers are often very different than expected and so can cause GBP/USD rates to change dramatically.


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