Welcome to the Angloinfo weekly currency round-up from Currency UK. We aim to answer the big questions you may have regarding the world of currency without all the jargon. Each week we’ll be summarising the week gone by, as well as highlighting some things to look out for in the coming week.
Last week, high oil prices and Dollar weakness meant the Pound soared, reaching its highest level since before the EU referendum in 2016. The strength of the Pound was also helped by a lack of Brexit headlines, which have a tendency to drag the Pound down. The Pound also enjoyed some strength against the Euro, rising towards the end of the week.
Over in the United States, the economy showed signs of strength but this wasn’t reflected by the Dollar. The Dollar was fairly weak all week against both the Pound and the Euro. There are, however, higher expectations of an interest rate increase in March, and this could give the Dollar a boost in the coming weeks/months.
The Euro had a fairly good week, reaching three-year highs against the Dollar mid-week. The progress made by the German government towards forming a coalition provided the support, as well as rumours surrounding future policy changes by the European Central Bank (ECB). The Euro’s spike against the Dollar lessened as the week came to a close.
Looking forward to the week ahead, Tuesday sees the Bank of Japan’s interest rate decision. It’s unlikely to change, but if the Bank does something unexpected it could affect the strength of the Japanese Yen.
Thursday is a busy day, with events happening in countries all over the world, starting with the European Central Bank’s interest rate decision and following press conference. As with the aforementioned Bank of Japan decision, a change is unexpected, but if that does happen it could have ramifications for the strength of the Euro against the Pound and Dollar. The Pound has had a good run against the Euro recently, and this could change if interest rates move.
Next on Thursday, focus moves to Canada where retail sales data is to be announced, where a positive reading could strengthen the Canadian Dollar. If you’re dealing with Canadian Dollars, we recommend you keep an eye out for this. Later on in the day, we’re back to Japan where the Bank of Japan’s monetary policy meeting minutes are to be released, where positive news could give the Japanese Yen a boost.
The week ends with major data from the US, with GDP data being announced. Positive GDP data could spell the end of the Pound’s significant strength over the Dollar, so if you’re dealing with Dollars, this is something to look out for.
If you are planning any transactions next week, these are events that you will want to consider. Contact Currency UK for more information.