Sterling -Euro and data for the Pound this week
With head of the European Central Bank Mario Draghi giving us very positive comments last week, Spanish bond yields heading away from the troubled 7% marker and U.K PMI data highly disappointing last week the Pound may struggle again in the early part of this week. It appears the opportunity may have gone for those looking for a great time to buy Euros and once again it will be those that got too greedy that will miss out. Again who knows what is around the corner for the Euro as there is no smoke without fire, but it does look like for the time being things have calmed down a little.
Data this week that may affect this pairing is tomorrow at 15:00 roughly we have the GDP estimate from the NIESR (National Institute of Social and Economic Research) and this is generally regarded fairly highly by investors, a negative figure could lead people to believe we are even deeper in recession than we currently believe we are and a slightly more positive prediction of the growth figures of the U.K economy may lead to a good end to Tuesday for the Pound.
Wednesday sees the Bank of England inflation report, which may as always give indications to future monetary policies for the U.K.
Thursday we have the European Central Bank monthly report which again could throw anything into the mix, following the positive comments from the head of the ECB last week investors will be highly interested to see what comes from this and what the future plans from the ECB are, this will affect all currencies as it may throw up a change in global attitude to risk.
Sterling – Dollar
Following promising Non-Farm Payroll data the Dollar has started to charge again against Sterling and we see little data of note for the States this week however data for the Pound as above and attitude to risk will be key for this pairing. Should the ECB make investors be willing to take risks then the Dollar may weaken, should they do quite the opposite then investors may run to the Dollar as a safer haven and the Dollar may gain strength.
Sterling -Australian Dollar
A busy week for the Australian Dollar this week after a really poor performance from the Pound against the AUD last week. We have the Reserve Bank of Australia interest rate decision tomorrow very early in the morning, no change in rates is expected however should the RBA surprise us with a rate cut then we may see the rates move back in the right direction for those looking to buy Australian Dollars. On Thursday early at 01:30am we have an inflation release from China and some unemployment data from Australia so those with an interest in AUD may wish to put some protection in place overnight as we may see some sharp movements out of office hours following this data being released.
On Friday at 01:30am we will also have the Reserve bank of Australia monetary policy statement and this may also lead to a volatile AUD overnight as it may give an indication as to how they plan to tackle the strong AUD (which cannot be doing exports too good) and also whether we may see a change in interest rates in the coming months. personally I would not be surprised to see the AUD weaken a little overnight after this statement.
Sterling – Canadian Dollar
Not too much out of note for Canada this week and once again the U.K data will be most important however those looking to buy or sell Canadian Dollars must take note of unemployment data due out on Friday at 13:30pm. Expectations are for unemployment to have crept up a little so we may see the pound gain a little ground at the end of the trading week.
In general much depends on what we see from the U.K economic data releases this week but I would hope to see Sterling battle back against most majors over the week. If Team GB is anything to go by then confidence in the U.K is slowly creeping up and personally I don’t feel the current recession is as bad as is being made out, as normal the U.K media is doom and gloom though which tends to bring everyone down with it so I would hope to see better data results in the coming months.
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