Today's market reports

The latest market report is shown below. There may be some supplementary information and links towards the end of the report.

If you have any questions on the content of this or any other report, you are welcome to email the author directly or contact your FCD account manager to discuss the implications for your own transactions.

Sterling Exchange Rate Forecast

 

Market Snapshot

The table below shows the difference between where the respective currencies started the week and where they closed.

Currency Pair    Week Change
GBP EUR             -0.5%
GBP USD             -2.3%
GBP CHF             -0.5%
GBP JPY              -4.0%

GBP USD Exchange Rates hit 8.5month low

As shown above, the Pound had a tough week against the US Dollar during the course of last week’s trading. The Pound fell to a 8.5 month low against the US Dollar even after US non-farm payroll figures were released worse than expected. It has been stated that this is because of concerns over the Eurozone debt problems and a shift of investors to the ‘safe haven’ dollar. For anyone who may have been looking to send money to the US, the spike witnessed at the start of the week was seen to be short lived, as often these exchange rate movements can be. Keeping in close contact with your account manager is essential to achieve the optimum rate of exchange for your currency requirement. If you do not have an account already, open a free no obligation trading facility in a matter of minutes by clicking here.

Interest Rate Decisions

Last week we saw the Bank of England and the European central bank both keep their base interest rate levels on hold. The Bank of England also kept their QE stimulus program on hold at £200bn. Some support was leant to the pound on this news, however this was short lived, as the Sterling exchange rates started to fall back during Fridays trading.

Retail Sales a key indicator?

Very early tomorrow morning, 12.01am, we see the British Retail Consortium release their retail sales figures for January. There is no concrete prediction on what may be released as yet, but Decembers figure showed a 4.2% increase. If the figures show further growth then support may be leant to Sterling or alternatively if the figures come out less than this we could see the Pound slip.

German Inflation

Tomorrow, at 7am, we find out German CPI data for January. CPI is a key indicator of inflation, and generally with high inflation we see increased interest rates. All eyes therefore will be on this release tomorrow, as with the Eurozone already beating the UK out of recession last year then being before us in raising interest rates could also show support for the single currency, possibly pushing GBPEUR exchange rates ever closer to parity.

UK GDP Figures

On Wednesday the NIESR (National Institute of Economic and Social Research) release their GBP estimate for January. January’s estimate of December’s figures was 0.3%, the actual figure then came out at 0.1%. Wednesday’s predictions could shine more light on whether the UK is actually clear of the longest recession witnessed in the UK since World War 2. There has been a lot of speculation around a ‘double-dip’ recession where a nation comes out of recession one quarter just to slip back the following. Fourth quarter GDP for the UK showed a 0.1% increase, leaving not much breathing space for the next release.

BoE Inflation Letter

Later on Wednesday the BoE release their inflation letter, this gives a detailed economic analysis and inflation projections. This explains to the nation why inflation is not at its target level and how the bank may control it in the future.

If you have any questions on how these or any other data releases may affect your transfers, we are always just a free phone call away on 0800 328 5884 or simply request a call back by clicking here.