Sterling exchange rates had a pretty rough week, which got rougher on Friday afternoon when BoE member Ramsden spoke and mentioned that “risks to persistence in domestic inflation pressures are receding”- which essentially shows that he will be voting for a rate cut in June. This, of course does not mean that a cut will definitely happen, but to see a BoE member saying this publicly definitely does increase the chances of it happening- after this speech we saw GBPEUR at 1.16 and GBPUSD at 1.2370. Although arguably cutting interest rates will be positive for the UK consumer and potentially boost spending, the reason we see the Pound weaken is due to the fact that it will mean less foreign investment for the UK due to lower interest being gained.
Last week we saw that the Israel and Iran conflict was close to escalating further, so far we are still in the same position and the market is waiting for more news around this topic, we are seeing the Dollar strengthen considerably and stocks have taken a hit over the last couple of weeks, this is not unusual before the month of May typically but with the risk of war as well, we have to ignore technical and fundamental analysis to understand why the Dollar has strengthened and why the market is a little risk off currently.
This week isn’t massive for data releases- but I have listed below anything interesting through the week which could potentially affect markets, if you would like any particular analysis please don’t hesitate to reach out to me directly.
Monday-
- EU Flash consumer confidence
- ECB President Lagarde Speech
Tuesday-
- EUR Flash PMI’s
- UK Flash PMI’s
- US Flash PMI’s
Wednesday-
- U.S Durable goods orders
Thursday
- U.S GDP Data
- U.S Jobless claims
- U.S Pending home sales
Friday
- Bank of Japan Interest rate decision (No change expected)
- U.S Core PCE Price index
- U.S Michigan consumer sentiment