Following on from a number of weeks of political turbulence, not to mention the start of Brexit discussions this week it does appear that focus will move back to economic data and how the U.K economy performed throughout June. The below table shows the market movements for a number of GBP currency pairings in the last week:
|Currency Pair||% Change||Difference on £200,000|
We have plenty of economic data for investors to consider this week – here are the highlights for you to look out for.
Today the ball starts rolling with U.K Construction data at 09:30am. Expectations are for a slight drop off in performance but nothing too dramatic so I would not expect to see large movements off the back of this unless we get a big surprise.
Later on this morning we have the U.K inflation report hearings which in my view really could lead to larger market movements. Mark Carney, Governor of the Bank of England has recently been commenting about high inflation and has even given the nod to a potential interest rate hike to try and resolve it. Even the slightest hint towards a change in interest rates may lead to large swings for Sterling exchange rates so if you have a currency exchange to carry out in the coming days, weeks or months then it may be prudent to let us know, we can then highlight any buying or selling opportunities that arise.
Wednesday brings us PMI Services sector data at 09:30am. The services sector makes up a good amount of our overall growth (GDP) figures for the U.K as we are now so serviced based. It can have a fairly big impact on the value of the Pound should the figure be widely different than expected so Wednesday morning could be volatile depending on the result.
Thursday morning is fairly quiet for U.K economic data, however Thursday afternoon has the potential for more movement as we have the release of NIESR (National Institute for Economic and Social Research) growth estimates at roughly 3pm. The reason this can be a market mover is that the NIESR prediction of economic growth is rarely far from the actual figure, so with the market moving on speculation as well as fact, investors will price in the prediction leading to the Pound value being corrected as soon as it is released.
Friday is another busy one to round the week off, both for the U.K and the U.S too. At 09:30am we have a flurry of data from the U.K with industrial, manufacturing and trade balance figures all being released at the same time. Expectations are for the figures to have improved a little so this may start the Pound off on the right foot for the final day of the trading week.
Later on in the day we have Non-Farm payroll data and employment figures for the U.S. It is commonly said that when the U.S sneezes the U.K catches a cold so these figures can impact Sterling exchange rates almost as much as it can impact the Dollar.
All in all I actually feel we may have a slightly more positive week for the pound this week as long as economic data does not paint a damning picture for the economy going forward. Now that the political issues have got a little quieter we can focus on how the economy is actually performing and I would hope that we have made some positive steps in the right direction.
If you have an exchange to make in the near future then it would be prudent to call us and inform us today so that we can act as your eyes and ears on the market. Contact our trading floor on 01494 725353 today to speak to one of our brokers so that they can assist you in these tricky and volatile times.
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