Monday, 16 May 2016

GBP/EUR, GBP/USD and the week's economic data releases

Good morning and welcome to a new week. In today's post, I'll give a quick overview of where GBP/EUR and GBP/USD exchange rates stand, and list this week's data releases that could affect exchange rates.

Sterling/Euro

 


Pound to Euro exchange rates continue to trading within a range of €1.26 to €1.27. It's relatively quiet week for data releases (see below) so I expect the referendum and sentiment to continue to drive this pair. Over the weekend Prime Minister Cameron and IMF head Christine Legard continued to warn over the risk of a 'Brexit'. However 306 Business Leaders signed a letter backing a 'Brexit' which was published in the Daily Telegraph. This could lend support to the 'leave' campaign and weaken the Pound a little. At the moment the polls are almost 50/50 so anything that swings sentiment one way or the other could affect Sterling accordingly.

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Sterling/Dollar

 



Better than expected US Retail Sales on Friday strengthened the US Dollar, pulling GBP/USD rates down to the $1.43's. Earlier this month it was as high as $1.47, so the dollar has been gaining strength recently and becoming more expensive to buy.

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Other currencies


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This week's economic data releases that could affect exchange rates


Monday 16th May 2016 - A very quiet start to the week, with barely any data of note being released. There is a Housing Market index from the USA, and a quarterly review from the Bank of Canada, so there may be some effect on GBP/USD and GBP/CAD.

Tuesday 17th May 2016 - The most important release today is a measure of UK inflation released at 09:30am. A weaker than expected figure could push Sterling lower. We also have Trade Balance figures from the EU. Across the pond, the USA also has a raft of inflation figures so it could be a choppy day for GBP/EUR and GBP/USD.

Wednesday 18th May 2016 -  Rates to buy Australian Dollars and New Zealand Dollars could be affected today. We have Speeches by key members of their central banks, which could affec the value of their currencies. In Europe, there is an ECB meeting, and a raft of inflation numbers that could affect GBP/EUR rates. Over in the USA< we have the minutes to the latest FED meeting. This is a key release for GBP/USD rates.

Thursday 19th May 2016 - Today's main UK release are the latest Retail Sales figures. These are a good indicator of the economy and so could affect the Pound. GBP/EUR rates could also be affected by any surprises from today's ECB Monetary Policy Meeting. Over in the USA, we have Jobless Claims, and manufacturing figures that could affect GBP/USD.

Friday 20th May 2016
- It's a quiet end to the week with no scheduled releases of note for the UK or Europe other than some German inflation data. GBP/CAD could be volatile today however, as we have the latest inflation numbers released at 13:30pm.

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