Monday, 24 March 2014

What could move exchange rates this week?

Monday 24th March 2014 
Good afternoon. It’s been a pretty quiet day with not much change in exchange rates since my post last Thursday. Pound/Euro remains at €1.1950, and Pound/Dollar remains at $1.6500. 

With regards to whether Pound/Euro rates will recover any time soon, my view hasn't changed. I don't think it will go back through €1.20 unless we get some economic data that is significantly better than forecast. 

In the absence of anything new to move the markets, today I will list all the weeks’ data that I think might affect exchange rates this week. UK GDP data and a speech by ECB president Mario Draghi could both affect GBP/EUR exchange rates moving forwards. 

This week’s economic data releases that may affect exchange rates. 

Monday 24th March 2014 

Exchange rates have been relatively flat today, however we did see a raft of Inflation data from the Eurozone this morning. The figures were a little lower than expected, weakening the Euros and pushing GBP/EUR rates from 1.1940 to 1.1970, so a slight increase but not by much. 

Tuesday 25th March 2014 

I think the most important release today is a speech by ECB president Mario Draghi at 4pm. It was his recent comments that caused GBP/EUR to drop below the €1.20 mark. If he continues to be upbeat about the EU economy, rates could dip further. 

Other than that, we have UK Inflation, in the shape of the Consumer Price Index (CPI). I expect this to be around the 1.6% mark. Any higher will push Sterling up and vice versa. 

Over in the states we have consumer confidence figures and Home Sales data, both of which could affect the Pound/Dollar rate. 

Wednesday 26th March 2014 

There is nothing of note from the UK or EU today, so focus will be on US data. This includes Durable Goods orders, Bank Stress tests, Inflation numbers and mortgage approvals. 

Thursday 27th March 2014 

UK Retail Sales are released at 09:30am this morning. These are closely watched as they reflect overall economic health. The number will be around 4.3% I should think. If it’s lower than this then the Pound will fall, and if higher we could see Sterling get a boost. 

Elsewhere all data is from the States – Jobless Claims, GDP figures, Home Sales – expect a choppy day for GBP/USD rates. 

Friday 28th March 2014 

Today will be a key day for Sterling exchange rates, as we have the latest GDP figures from the UK showing how the economy is growing. Quarterly growth is forecast to be 0.7%, so any deviation from that figure will affect the Pound accordingly. 

Elsewhere it’s a busy day in the EU, with Economic sentiment indicators and German inflation data being release, but all focus will be on the UK GDP numbers. 

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