Exchange Rate Forecast for the Week Commencing 24th March

The week starts today with a quiet day with very little economic data meaning we may have a relatively quiet day however Tuesday has a raft of major economic data due for release in the UK which includes mortgage approval data, inflation data, house price figures and production numbers all of which will help paint a picture of how the UK economy is currently performing. Out of all these releases it is likely that the inflation figures will have the biggest propensity to shift Sterling exchange rates and while the expectation is the number will remain relatively similar should we see the level fall slightly it could cause some GBP weakness while the reverse is also true. I have also stated that UK house prices will be a big factor in the continuing recovery of the UK economy and also Sterling exchange rates and this was re-affirmed by comments in the recent budget and so tomorrows house price figures could also be very important to monitor if you have an upcoming international currency transfer.

On Wednesday there is yet more UK house price figures but also US mortgage numbers and further information on the recent US bank stress tests which had shown the major banks had passed the tests but only just and so this extra information could give a further insight into the strengths or otherwise of the US banks.

Thursday has key UK retail sales figures due for announcement which will indicate how the UK high street is performing and could be a good sign as to whether the recent floods have had a negative impact on the UK retailers which some fear will damage many businesses. Also on Thursday are US Gross Domestic Product (GDP) figures as well as jobless figures, personal consumption expenditure and also pending home sales meaning it could be a very busy afternoon for the US Dollar.

The week finishes with UK consumer confidence figures and also the latest revision of the Quarter 4 2013 GDP figure which is likely to remain at 0.7%. These two data releases are absolutely key for the UK and so could lead to a lot of volatility for GBP exchange rates at the end of the week.

So, despite a quieter week for economic data in the currency markets there is still a chance for a lot of movement on the currency markets and with Sterling slightly lower against the EUR and USD it could do with some positive economic data to provide it with a boost so Friday’s GDP figures will be very closely watched with the hope that we may see an upwards revision although this does remain an outside chance.