Monday, 8 August 2016

What could move exchange rates this week?

It's been a pretty stable start to the week, with not much in the way of economic data releases to move exchange rates. On Friday, we saw much better than expected US jobs numbers, which strengthened the US Dollar and pulled GBP/USD rates lower. This in turn has also meant investors are happy to take a little more risk, buoyed by the strong jobs numbers from the world's largest economy. This in turn has meant stock markets are up a little, but the Pound hasn't managed to recover its losses following the interest rate cut, and remains down at around €1.18 vs the Euro. Against the US Dollar, it's at its lowest in about 3 weeks.

Which direction will the Pound take this week?


Today is pretty quiet, but later this week we have some important data that could start moving Sterling exchange rates, for example the latest industrial data from the UK, and Trade deficit numbers on Tuesday.  Below, I'll list the main economic data releases for the week ahead and how these could affect exchange rates.

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This week's economic data releases


Monday 8th August 2016 - It's been a quiet start to the week in terms of economic data releases, but later this evening at midnight we'll see UK Retail Sales numbers for July, which could affect the Pound.

Tuesday 9th August 2016 - Today we have some fairly important data for the UK in the form of Industrial and Manufacturing production for June, along with a NIESR GDP Estimate for July. The production figures reflect some post-brexit activity, as does the GDP estimate. If these figures are worse than expected, then Sterling exchange rates are likely to fall. We also have import and export data from Germany that could affect the value of the Euro.

Wednesday 10th August 2016 - We have UK House Price Balance data today that shows the strength of the housing market. The figures are a reflection of the economy as a whole, and could well affect Sterling exchange rates.  Elsewhere, those looking at GBP/NZD should note that New Zealand is likely to cut its interest rates today which is already expected and largely priced in to the rate, however any hints at future monetary policy could affect the rate further. We also have a speech by the Australian central bank governor today which might affect GBP/AUD rates. Finally we'll also see a monthly budget statement from the USA that could move GBP/USD rates. 

Thursday 11th August 2016 - The UK and EU are relatively quiet today, so focus will be on the US Trade balance data that could move GBP/USD, and the latest Retail Sales data from New Zealand. It's a good barometer of overall economic growth and so often impacts GBP/NZD rates.

Friday 12th August 2016 - It's an important day for the EU, with GDP figures due from Germany and the EU as a whole. We also see German inflation data, so the single currency could face some choppy trade. Over in the USA Retail Sales data could move GBP/USD.