Tuesday, 2 May 2017

What could move exchange rates this week?

The Pound has steadied somewhat since last week, still just above €1.18 vs the Euro but unable to go much higher. Poor GDP figures on Friday slowed Sterling's progress, and now that Brexit negotiations are almost underway, caution has returned to the markets.

We've seen a taste of what is to come this weekend, when EU commission president Juncker leaked details of a recent meeting to the German press. Hopefully the next 2 years won't involve similar negotiation tactics and the 2 sides can actually strike a deal that works for both the EU and the UK, as both sides could very easily end up losers.

Will Pound/Euro go much higher? I personally don't think so. The final round of the French elections this Sunday could give the Euro a boost should Macron win as the polls expect. If you need to buy Euros, click here to get a free quote.

What could move exchange rates this week?


Politics, Brexit negotiations, and polls for the French and UK elections will continue to drive Pound/Euro rates. These could come at any moment and so are difficult to foresee and could move exchange rates it either direction. Economic data releases are forecast in advance however, and the main ones for the week ahead are as listed below. If you need to make a currency transfer and would like to find out what rate we can offer you, send a free enquiry today.

Tuesday 2nd May - UK markets open after the long weekend, and we've already seen better than expected UK manufacturing data, and worse than expected EU unemployment figures. This has helped nudge GBP/EUR a little higher with this pair only around 1.5% below the best it's been since last year. Later this evening we have unemployment data from New Zealand, expected at about 5.2%. If the actual number differs expect GBP/NZD rates to move accordingly.

Wednesday 3rd May - The only UK data of note is Construction data due at 09:30am. Of more importance to GBP/EUR rates will be the EU GDP figures due at 10am. They are expected to show monthly growth of 0.5%. If the actual number is higher, then GBP/EUR will probably drop, and vice-versa.  Over in the states, we have an interest rate decision and monetary policy statement. I think rates will stay at 1%, but any hints as to a further rise soon would strengthen the USD and bring GBP/USD rates lower.

Thursday 4th May - The main GBP/EUR driver today will be UK Credit and Mortgage Approvals, coupled with EU Retail Sales and Services PMI. There is also a speech by ECB president Mario Draghi at 5.30pm. GBP/AUD could be affected by a speech by the RBA governor giving a speech. GBP/USD will be affected by the latest Jobs data and Trade Balance figures. 

Friday 5th May - It's a pretty quiet day in the UK with no releases of note. The main event today will be the US Non-Farm Payroll numbers. These are often very different to what the markets are expected and so often cause quite a change in Pound/Dollar rates. Also of note will be Sunday's election in France - a Le Pen win would weaken the Euro and send GBP/EUR higher. If she does not win, then expect Pound/Euro to drop as the Euro gains strength and becomes more expensive to buy. 

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