Monday, 6 January 2014

Will Pound/Euro rise or fall in 2014?

Monday 6th January 2014 
Good afternoon everybody and welcome to a new year. I am back in action today with regular updates on exchange rates. For new readers, this blog is updated several times per week with an outline of what is happening with exchange rates. This should prove useful for anyone following the currency markets that needs to buy or sell foreign currency, perhaps when buying or selling abroad or for example business’s that import or export to other countries. 

In addition to my blog providing currency updates and foreign exchange forecasts, I can also help you source exchange rates up to 5% better than you can achieve at banks and other financial institutions through the company I work for. If you are interested in getting a quote or would like to find out more, click here to send me a free no obligation enquiry. 

So what has been happening with exchange rates so far in 2014? 

It’s been a relatively muted start to the year. Pound/Euro rates remain a little above €1.20 which is around the highest in a year, and Pound/Dollar rates remain just above $1.64 which is not far off the highest in several years. In my last post I outlined what had been happening last year that had caused rates to rise to the current highs. 

So far this year, the Pounds rise seems to have ended. On the first working day of the year we saw some disappointing Manufacturing figures that pulled Sterling lower, but Construction figures impressed and this brought things back to where they were. Today has been relatively quiet on the markets, with a mix of data from Germany that weakened the Euro a little, but not by much. 

So today I will list the remaining data releases this week that I think will affect exchange rates. Remember if you would like to get a free quote or discuss your requirement with me for free, you can send me a free enquiry by clicking here. 

This week’s data that could affect exchange rates. 

Tuesday 7th January 2014 

There aren’t any releases from the UK today, so those looking at Pound/Euro rates will be focusing on data from Europe. We have German Unemployment and Retail Sales, along with inflation data for the Eurozone as a whole. Better than expected figures would strengthen the Euro and pull GBP/EUR rates lower. Elsewhere US Trade Balance figures could affect Pound/Dollar rates. 

Wednesday 8th January 2014 

Again nothing of note from the UK. EU data today is Retail Sales and Unemployment data, and if the numbers differ from forecast, expect volatility in the Pound/Euro rate. In the USA we have Mortgage Approvals, Employment data, and minutes from the recent FED meeting where QE tapering was announced. 

Thursday 9th January 2014 

We finally get going with some news from the UK: firstly we have Trade Balance numbers which are very important for the economy, and so could affect the value of the Pound. At lunchtime we have the latest decision on QE and interest rates; I don’t expect any change, but any comments that accompany the announcement could have an effect on exchange rates. 

In the Eurozone we also have an interest rate decision, and I expect rates to stay on hold at 0.25%. Again as with the UK, in the press conference after the decision, any hint at a future rate cut could weaken the Euro and push GBP/EUR rates higher. We also see Consumer Confidence, Economic Sentiment, and Industrial confidence measures. We end the day with Jobless numbers from the United States. 

Friday 10th January 2014 

The only UK data of note today is Industrial and Manufacturing Production numbers released at 09.30am. We also have a GDP estimate from the National Institute for Economic and Social research. The most recent estimate was 0.8% - anything above this will cause the Pound to rise, and vice versa. Today we also see US Non-Farm payrolls – the actual figure is usually quite different to the forecast, as it’s so hard to predict, and therefore causes swings in the GBP/USD rate. 

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Alastair Archbold