Following weak GDP Data in the UK, Sterling exchange rates began to fall further with GBPUSD exchange rates now below 1.39 and GBPEUR exchange rates now below 1.14. The reason why this has weakened the Pound further is it now seems that the Bank of England will not go for an interest rate hike in May, so the expectation is that we may see further losses for the Pound over the coming weeks.
This week is quite important as we have a number of releases from the UK, Eurozone & the U.S which may set the tone for the exchange rates this month which I have bullet pointed below-
- Wednesday- Eurozone GDP Data (Expected to show a contraction in growth which could weaken the Euro as it implies the ECB will extend their QE measures)
- Wednesday- U.S FOMC Rate Decision- (No Hike expected, but any mention of the next hike could strengthen the Dollar further)
- Thursday- UK Local Elections
- Thursday- Eurozone Inflation Data (Expected to show a lower figure which could weaken the Euro)
- Friday- U.S Non Farm Payrolls (Notoriously unpredictable, expected to show a higher number)
Though it seems the Euro could have a bad week, Sterling is on the back foot and the local elections could provide some political uncertainty for the Pound, and uncertainty nearly always weakens a currency.
If you have an upcoming transaction you would like to discuss please don’t hesitate to contact me.