After an important week of data and Central Bank decisions- Sterling exchange rates have managed to stabilise higher than where they started last week, both up around 1% respectively. The main reason for this was the Bank of England meeting where Governor Bailey stated that interest rates are not going to be cut just yet and that they will have to remain higher for now. this gave Sterling some momentum over Thursday and Friday.
This week we have a few data releases to note- the first being the RBA interest rate decision on Tuesday morning, where we are expecting the interest rate to increase by 0.25%- this will be interesting as it will bring the Australian interest rate to 4.35% and potentially add some strength into the Australian Dollar. Later on Tuesday, we have a few Fed speeches that could be noteworthy given the Fed’s current rhetoric, anything said about cutting rates would have an effect on the market.
On Wednesday we have German inflation data which is expected to show a marked drop year on year, this will be followed by a speech from Fed Chair Powell later in the day, again, anything mentioned about monetary policy will have an effect on the exchange rates- specifically anything involving the U.S Dollar. We do also have Eurozone retail sales which are expected to come in negative, so Wednesday may not be a great day for the Euro.
On Friday we have UK GDP, Balance of trade, with industrial and manufacturing production- which will make for a very volatile morning, we are expecting GDP to potentially come down, and for production numbers to come in weak- so the Pound could have a bad end to the week.
All in all it is a pretty quiet week on the data front- if you have any specific enquiries please don’t hesitate to contact me