The October 31st Brexit deadline has come and passed, with the UK being granted an extension by the EU until January 31st.
It will be of interest to see if the pound can maintain its recent rise in value in the face of increasing concerns ahead over Brexit. Towards the end of October there has been mounting speculation over the 12th December election. At the time of writing the Conservatives are the favourite to win at odds of 10/11, Labour are 23/1 and Lib Dems 99/1.
Historically speaking, an election leads to an increase in political uncertainty which has previously seen the pound weakening in the run up to the event. This was the case ahead of the 2010, 2015 and 2017 election as the market had to digest the potential for various outcomes.
Boris Johnson might be leading in the polls, but recent history tells us not to take too much direction from the polls which failed to correctly predict the outcome of recent elections and the EU Referendum.
The election will undoubtedly feature Brexit as a central issue to shape the vote, November will likely be dominated by the topic of this election, which may see increased volatility on sterling exchange rates. Whilst we take the polls with a pinch of salt, the market must rely on something for information and in the usual manner the polls seem likely to form a part of the conversations to provide investors with some colour to sterling exchange rates.
The 1st of November sees US Non-Farm Payroll data, a key component of assessing the US economy. Expectations ahead are for a decline in the number of new non-agricultural jobs being created.
The 31st October will have been the latest US Federal Reserve (Fed) Interest Rate decision where we will learn of the latest views by the US Central Bank on monetary policy. Expectations ahead are linked to change in the global economic outlook, including the Trade Wars.
The US is likely to have cut interest rates which will typically weaken the currency concerned. However, the move was expected in advance so the currency market will be closely monitoring the outlook and commentary from the Fed as a guide as to where US dollar rates may be headed.
The end of October saw increased expectations over the likelihood of the US and China forming a trade agreement. The US dollar has been rising and falling as the market reflects changing attitudes on the Trade Wars in its assessments of the US dollar.
In Europe, a new European Central Bank (ECB) President Christine Lagarde will provide the market with the latest news surrounding her outlook for the European economy. With concerns over how effective ECB policy of cutting interest rates has been, Lagarde is joining the ECB at a crucial time.
The 10th November sees a Spanish election, the fourth in four years. The euro has historically been put under pressure from politically uncertain events, the potential for more extreme parties to gain traction in the election has been well documented in the polls.
Here is a snapshot of some of the key economic releases in November, although there are many more which may influence the market and various currency pairings.
|Friday 1st – GBP – USD||UK Markit Services PMI (Purchasing Managers Index) data (UK) US Non-Farm Payroll data and Unemployment (USD) ISM Manufacturing PMI (USD)|
|Tuesday 5th – AUD – NZD||RBA (Reserve Bank of Australia) Interest Rate Decision and Rate Statement (AUD) New Zealand Unemployment Rate (NZD|
|Thursday 7th – GBP||Bank of England Interest Rate decision (GBP)|
|Friday 8th – CAD||Canadian Unemployment Rate (CAD)|
|Monday 11th – GBP||UK GDP (Gross Domestic Product) data (GBP)|
|Tuesday 12th – GBP||UK Unemployment data (GBP)|
|Wednesday 13th – GBP – NZD||RBNZ (Reserve Bank of New Zealand) Interest Rate Decision (NZD) UK Inflation data (GBP)|
|Thursday 14th – GBP – EUR – AUD||Australian Unemployment Rate (AUD) German GDP and Eurozone GDP (EUR) UK Retail Sales (GBP)|
|Friday 15th – USD||US Retail Sales (USD)|
|Wednesday 20th – USD – CAD||FOMC (Federal Open Market Committee) Minutes (USD) Canadian Inflation (CAD)|
|Thursday 21st – EUR||ECB (European Central Bank) Monetary Policy Minutes (EUR)|
|Friday 22nd – CAD||Eurozone Composite Markit PMI (EUR) Canadian Retail Sales (CAD)|
|Wednesday 27th – USD||November – US GDP (USD)|
|Friday 29th – EUR||November – Eurozone Inflation and Unemployment Rate (EUR)|
If you are considering a currency transfer, buying a property abroad or looking to bring funds back to the UK from overseas, 2019 has a number of potential events which could create some excellent opportunities for well-prepared buyers and sellers.
In any event, our currency experts are on standby to answer any of your questions, so feel free to call our trading floor on 01494 725 353 if you would like to discuss a transfer.
Do you intend to open a bank account in Spain? This might be because you’re planning to emigrate to the Iberian peninsula with your family, to start a new life in Marbella or the Costa Blanca. Alternatively, this could be because you want to buy a Spanish holiday home, to enjoy year-round escapes to sun, […]
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