Currency Exchange Rate Outlook

Following a busy week last week there are some further key economic data sets due this week, especially for Sterling exchange rates including the latest Gross Domestic Product estimate and this month’s interest rate decision.

Monday – The week starts off quietly with Swiss inflation figures already announced this morning at 0% which is up marginally from last month and although an improvement is good it shows that the Swiss economy is still facing some challenges and will need to monitor their inflation levels very closely over the coming weeks and months. Later on today we have New Zealand business confidence figures and a speach in the US from the Fed in what is a very quiet afternoon for economic data.

Tuesday – Tomorrow is a much busier day with the latest Bank of Japan interest rate decision which is expected to remain on hold at the record low level of 0.1% this is followed by Swiss unemployment levels and Swiss Retail Sales figures both of which could be very important for the CHF. In the UK we have manufacturing figures and in the afternoon the absolutely key Gross Domestic Product (GDP) estimate from the National Institute of Economic and Social Research (NIESR). ThisĀ figure is a rolling 3 month estimate which gives a good indication as to how the actual GDP figures from the Office for National Statistics will come out and so could provide a big spark for Sterling exchange rates, if the figure is better than the previous release of 0.8% then it may lead to a boost for the Pound.

Wednesday – The day starts off with Australian consumer confidence figures and the UK’s trade balance figure while in the afternoon the focus shifts to the US with their latest mortgage application figures and possibly most noteably the latest set of minutes from the latest Federal Reserve Bank of America interest rate decision due to be announced. The US are continuing to taper their bond buying scheme and but there is a chance that the Fed will have discussed tapering faster than the current $10bn per month which may again generate some movement, especially on GBP USD and USD EUR exchange rates.

Thursday – Thursday morning has Australian unemployment figures out first thing which will give a good insight into the Australian job market and is expected to show a weakening which may provide a much needed boost for Sterling against the Australian Dollar. The major data set of note though is the latest interest rate decision from the Bank of England (BoE) where interest rates are expected to remain on hold at the record low of 0.5% but it will be whether the BoE decide to reduce their Quantitative Easing programme although this seems to be an outside chance at the moment. Having said this all eyes and ears will be on Mark Carney for any accompanying statement following the announcement.

Friday – The week ends in similar fashion to how it starts with very little economic data of note, the main data sets though include German inflation figures and US Production figures both of which could impact upon GBP EUR and GBP USD exchange rates.

So, despite a quieter week for economic data there are still some important announcements which may lead to some large swings in the exchange rates. So, for all the latest information keep in touch with this currency blog.