What moves exchange rates?
The four mains things are Economic data, political events, natural disasters and acts of war. Some of these are by their nature totally unpredictable, however economic data releases are known and forecast in advance.
While it's impossible to predict exchange rate movements, with a sound knowledge of what moves the rate and upcoming data releases, you can make an informed decision on what action to take in terms of when to fix a rate. Below I have listed the main economic releases for the week ahead that could affect exchange rates including Pound/Euro. Political events have been having a much bigger impact on the currency markets of late, so also watch for any Brexit developments or unexpected tweets by President Trump about his 'phenomenal' tax plans.
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This week's economic data releases:
Monday 20th February - Today is a US Market holiday so it's fairly quiet on the data front. We will see EU consumer confidence figures and a meeting of the EU's 27 finance ministers, so these could affect GBP/EUR rates today.
Tuesday 21st February - There are 2 things today that could affect the Pound. First we have Public Sector net borrowing figures at 09:30am. Of more importance will be a speech by the BoE Governor Mark Carney, during which he may give hints on future monetary policy. Of late his comments have caused the Pound to fall due to the dovish nature of his comments, and we could see that repeated today. Elsewhere we have inflation figures from the EU and the US.
Wednesday 22nd February - Today will be key for how the Pound moves against other currencies this week, as we have preliminary GDP readings that will show if the economy is still growing. The expected monthly gain is 0.6%. If it's lower than this then the Pound will fall in value. Elsewhere, EU inflation numbers could affect GBP/EUR, and Canadian Retail sales figures at 13:30pm could move GBP/CAD rates.
Thursday 23rd February - There's nothing much of note from the UK today, however Germany releases it's latest growth figures. As the largest economy in the EU, the numbers will be watched closely and could move GBP/EUR rates. We expect monthly growth of 0.4%, slightly less than the UK. If the number differs from this, then expect movement in Sterling/Euro rates.
Friday 24th February - We end the week with a raft of data from the USA and Canada. Canadian inflation numbers could move GBP/CAD rates. US Homes sales could move GBP/USD.
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