Sterling still being buffeted by the UK general election
Currency market update from Carl Hasty, director of Smart Currency Business.
Sterling experienced a modest end to last week, falling slightly against both the euro and US dollar following the latest round of television debates between political party leaders.
A lack of economic data releases this week will keep investor attention firmly fixed on the UK general election, with competition likely to intensify as we draw closer to the vote. The major UK event of the week looks likely to be the release of minutes from the latest meeting of the Bank of England (BoE) Monetary Policy Committee. Although the committee remained unchanged in its decision to leave interest rates on hold, investors will be looking for further insight into their reasoning.
Thursday will see the release of retail sales data for the month of March, which is forecast to show a slight slowdown in sales growth throughout March compared to the previous month. Year-on-year the growth is still expected to be a healthy 5.5%.
If you are looking to buy or sell sterling, we suggest contacting your trader now for live rates, news and currency-purchasing strategies.
Eurozone data this week; will it boost the euro
After what must be considered a better than expected week for the euro, Greece will yet again be the star of the show this coming week, and certainly be number one on the agenda for members of the Eurozone on Friday. The country is again finding itself in new troubles, and needs to try and sort out a new bailout package with its lenders in order to keep the bailout agreement extended.
This week’s data releases includes Aprils Flash Purchasing Managers’ Indices for the Eurozone which are expected to show continued expansion as the economy continues to inch its way forward. In addition we have two sets of data measuring business sentiment/confidence in Germany. These will be very carefully scrutinized given the importance of Germany to the Eurozone economy.
If you are looking to buy or sell euros, we suggest contacting your trader now for live rates, news and currency-purchasing strategies.
Will the US Dollar bounce back?
There was a positive end to last week for the US dollar. Inflation remained the same as the previous month, showing some stability, especially with the oil price still at very low levels, while a consumer spending indicator showed increased signs of positive spending. US Federal Reserve member Mester felt that the first quarter will underperform in the US, but feels the Federal Reserve has the tools and that the economy is ready for an interest rate increase.
It looks like it could be a quieter start to the week for the US dollar this week, with minimal data releases. Monday and Tuesday see no data releases, with the bulk of reports commencing on Wednesday. Existing home sales and crude oil inventories are expected to show slight increases on the previous month, while Thursday’s weekly unemployment claims are expected to register another high figure. The continued high figure of the weekly indicator is expected to effect the non-farm employment change at the start of May.
The Manufacturing Purchasing Managers’ Index is expected to show a small decline on last month, while still showing positive growth in the sector. Friday will finish off with core durable goods orders expecting growth. If any of these data sets deviate from expectations, we could see more movement in US dollar markets again this week.
If you are looking to buy or sell US dollars, we suggest contacting your trader now for live rates, news and currency-purchasing strategies.
How is China’s economy faring?
HSBC’s Purchasing Managers Index for China is released on Thursday. It is expected to continue to show contraction but an improvement on the previous month. China is not moving forward as quickly as it once did but is still a key driver for the world economy.
More positive data out of Canada saw it complete what was a very positive week all around, as it extended its position of three-month highs. This was largely due to Statistics Canada reporting that retail sales rose 1.7% in February, significantly exceeding the expectation for a 0.2% gain.
