Uneventful Week in the Currency Markets

This week has once again been a fairly uneventful week in the currency market with both the Euro and the US dollar trading more or less within a cent range of the Pound. The sentiment is still with the Euro as Brexit negotiations continue in Brussels marring Sterlings hopes of any significant rally against both the majors. With talks to strike a deal between the eurozone and the UK set to go on until March at least it may be some time until we have any clarity on what the outcome may be once again.

This spells bad news for Sterling as the longer these talks go on investors will not continue to have any confidence in betting on the Pound with no deal being struck and as such weaken the already ailing Pound. JP Morgan Currency analysts have recently suggested that they believe the Pound will see out this year potentially gaining on both its majors should Brexit talks be successful in the future, however they do not see this happening until at least the third quarter of the year.

This is, of course, is only their opinion and should they be correct it could be yet some time way away until we see any significant improvement for Sterling. Should you have a requirement in the coming weeks and months and holding out for Sterling to claw back substantial gains on the Euro then it may be a long wait and could potentially get worse before it gets better. With this in mind a forward contract option may be of help for any property purchasers in the coming months, call your account manager for more information and friendly guidance.

The end of the week brings a busy Friday as several data releases are set to be announced across the various zones which are likely to have an impact on the currency market. German GDP was released at 7 am this morning posting a negative year on year figure with a 1.6% contraction. At 10 am the Eurozone will post CPI figures which are expected to come in as the same as last month’s recording at 1%.

Over to Canada as they also release CPI figures which are expected to contract from last month’s posting of 1.9 to 1.4%. At 3.15pm in the US FED committee member William Dudley is due to speak which may cause some volatility throughout. In the evening at 6.30pm ECB member Benoit Coeure is set to speak which again may move the markets during the speech. Stay in close contact with your account manager here at currency index to be kept up to date.