Economic Data Due This Week – GBP, EUR, USD, CHF, CAD Exchange Rates
Today we start the last week of February with key inflation data in the form of Consumer Price Index figures which are expected to show a slight drop which, if this is the case, could bring more concern around the possibility of deflation for the Eurozone which may again raise the question about how the European Central Bank (ECB) will deal with this looming issue. Many analysts have stated that deflation is a very real threat for the single currency economy and that the ECB needs to act soon, but so far we have not seen any actions from the Central Bank. However, should inflation fall this morning then I would expect the pressure to increase on the ECB and then the markets will be looking for any signs from Mario Draghi and the rest of the ECB as to whether they plan any action in the coming months. As regular readers may expect a weaker than expected inflation figure today could cause EUR weakness and therefore some good buying opportunities.
Tomorrow the Eurozone’s largest economy, Germany, announce their latest Gross Domestic Product (GDP) figures and they are expected to show a slight rise which may provide some much needed good news for the Eurozone. Following this we have mortgage approval figures and then an inflation report both for the UK. Inflation has been strong for the UK recently with the Bank of England (BoE) keeping it on target at around the 2% level meaning the price of goods and services in the UK is remaining steady and showing positive signs for the UK economy. Finally the day ends with consumer confidence figures for the States which will give an indication into how the US consumer perceives their economy to be performing, should the figures be strong it effectively states that the consumer in America is prepared to spend money as they are confident in the performance of their economy and this could provide USD strength, however the opposite is also true.
On Wednesday there is a key economic data release for the UK and therefore GBP in the form of Gross Domestic Product (GDP) which is expected to show that in the last quarter of 2013 we grew at 0.7%, any positive figure here is good news for Sterling as it means the economy is growing and therefore should be positive for Sterling. This data is due for announcement at 9:30am and if the figures are different from expectations then we could see a lot of volatility in the currency market.
Thursday starts with GDP figures for Switzerland which is key for anyone with a CHF currency requirement, especially as it is expected that the figure will show an improvement. In a busy day for the Eurozone we have German unemployment, Eurozone consumer confidence and economic sentiment indicator as just a few of the key data sets due for release. Then, over the Pond in the States, we have new Fed Chair Janet Yellen due to speak and as she is so new to the position the markets are still listening to any comments she makes intently for any indication to future economic policies. We also have jobless claims for the US in the afternoon which will provide yet another indicator as to the performance of the US economy.
Finally, on Friday we have UK house price figures, more Eurozone inflation figures, Canadian and US GDP figures and a speach from Bank of England Governor Mark Carney. So, it is clear that it will be a busy day and so could result in some major exchange rate volatility.
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