The last week was volatile for the Pound, especially due to comments made in regards to Brexit negotiations from Germany, basically saying that they were happy to “Simplify” talks to ensure a deal gets done- what was even more interesting is this comment was then denied by the German Government which sent the Pound lower again. We finished the week on high following comments from Michel Barnier in regards to the Irish Border- and though things look slightly more positive in comparison to a few weeks ago, I wouldn’t expect the GBPEUR rate to hit 1.20 yet…
Brexit negotiations are still ongoing- and as we can see, the Pound is very sensitive to headlines and particular language being used in the media- so though there are positive points, it won’t take much for this to be reversed. If the UK does manage to make a deal with the EU (In good timing) Then I do see a possibility for the Pound to go above 1.15 against the Euro and above 1.35 against the U.S Dollar. Until then, I see 1.29- 1.30 as a good buying point on the USD and 1.11-1.12 as a positive area to be purchasing Euros.
This week is very busy as far as economic data and Central Banks are concerned- so if you are looking to make a transfer this week, please consider the releases below before making your transaction.
Monday- The UK will be releasing Industrial & Manufacturing figures alongside GDP and trade balance numbers- unfortunately at the time of writing there isn’t any forecasts for these figures- but looking at historical figures over the last few months, we may see positive trade balance due to the weaker Pound, and stronger manufacturing as well. In regards to GDP, The British economy has been hanging on at 0.1% growth, if we see this sleep to 0% then this could be very worrying, I am expecting this to be unchanged, but it is worth noting how close we are to recession territory,
Tuesday- The UK will be releasing Jobless claims and Average Weekly earnings numbers- I am expecting jobless claims to be down this month and as earnings to remain on par with previous months- if we do see something stronger then the Pound may react positively but there haven’t been massive changes in the economy to really warrant this.
Thursday- The BoE and the ECB will both be having their interest rate decisions- there are no changes expected this month, however, we will be looking for commentary from both Mark Carney and Mario Draghi in regards to future monetary policy, Brexit, and if Mark Carney will be extending his stay at the BoE- this is always a day of volatility so please ensure you are using market orders if you are looking to trade on this day.
If you have an upcoming transaction and would like to discuss your options within your timescale please don’t hesitate to contact me directly.