Sterling, Euro and US Dollar Outlook

This week sees the end of one month and the start of a new month meaning there is plenty of economic data due that could have a big impact on the major currencies, especially GBP, EUR and USD.

While today is a relatively quiet day tomorrow sees a raft of economic data released including economic sentiment figures and consumer confidence numbers in the Eurozone along side retail sales figures for Italy and unemployment data for Spain. However, the big news is likely to be the first revision of UK Gross Domestic Product (GDP) which, if revised up could cause some major Sterling strength and present some excellent opportunities for those clients looking to transfer funds internationally. Tuesday afternoon sees the focus move across the Pond to the States with their latest consumer confidence figures being possibly the most noteable data set. Finally, at around midnight the latest UK consumer confidence figures are set to be announced which will give a good indication as to how UK consumers view the economy and any positive figures here could provide yet another boost to Sterling.

It is likely that on Wednesday the implications of the GDP figures will still being digested but there is also a large amount of key data due, especially in the Eurozone. We have German retail sales and unemployment figures, Spanish GDP figures and probably most noteably, the latest set of Eurozone inflation data. Inflation has been one of the main factors influencing the Euro recently as there is a large amount of concern that the single currency economy could fall into deflation which could have catastrophic consequences on their economy. So, should these figures show another drop it could weaken the EUR and lead to more calls for the European Central Bank to act before it is too late. Finally, on Wednesday afternoon we have US GDP figures which, as per the UK’s are likely to be crucial for USD exchange rates but following this we also have US interest rate decision where rates are expected to remain on hold at the record low of 0.25% and another $10bn being reduced from their bond buying scheme as this continues to taper down. Any change from these expected figures could cause volatility.

Thursday sees mortgage approval figures in the UK and some house price data while the afternoon sees a raft of data from the US with a speach from the head of the Fed Janet Yellen, their latest jobless figures as well as some key manufacturing data. This means Thursday could be an important day for any clients that are looking to transfer USD.

Finally, the week ends with a very quiet day for economic data, however, that being said the always unpredicatble US non-farm payroll figures are set to be announced and as regular readers of this currency blog will be aware, that as the figures dealt with in this data set are so large the actual figure is often very different to those predicted which can lead to a lot of USD movement. So, if you need to make an international currency transfer there is plenty due this week that could cause movement in the markets and will mean it is worth keeping a close eye on all the latest developments.