Your Currency and Foreign Exchange Round-Up – 23/03/18

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 was a “super week” in terms of political and economic developments, with huge headlines on both sides of the Atlantic. The big story for the UK for the announcement that a Brexit transition deal had been agreed between the UK and EU. The deal allows the UK to seek trade deals freely, with the condition that they can only come into effect after the transition period has ended in 2020. As a result, the Pound shot up, exceeding 1.15 against the Euro and 1.41 against the Dollar. The Irish border situation still needs a concrete solution, however. Poor inflation data gave the Pound a wobble mid-week, but it recovered upon the release of some very low unemployment figures. Overall, it was a very good week for the Pound and those looking to sell the British currency.

The big story for the US was Trump’s decision to add a tariff on Chinese imports which has increased fears of a global trade war. Headlines in the US were generally disappointing from a Dollar perspective and the American currency was fairly weak across the board. Disappointing comments from the Federal Reserve (Fed) and the chairman Jerome Powell. There was also some uncertainty caused by Trump replacing his National Security Advisor just a week after one of his Senior Advisors resigned. It seems job prospects at the White House are as volatile as the Dollar has been of late, especially against the Euro.

Speaking of the Euro, it was a fairly quiet week for the European currency. Some disappointing data from the Eurozone and Germany held the Euro down, especially against the aforementioned strong Pound. The EU Leaders’ Summit was due to be a spectacle, but it was overshadowed somewhat but the announcement of the Brexit transitional deal jumping the gun and being announced before the Summit. The Euro has been quite choppy against both the Pound and Dollar, weakening overall against the former while strengthening overall against the latter.

On Thursday, the market focus will be stretched across three different countries in three different continents. Firstly, in Germany, where pricing data is due to be be released. This could have a large effect on the strength of the Euro. Secondly, in the US, we see more personal expenditure data; the combination of this and the aforementioned US data could see the Dollar rise or fall significantly. Thirdly, in Japan, the pricing data due to be released could affect the strength of the typically-stable Japanese Yen.

Friday will be very quiet due to it being Good Friday and a Bank Holiday in many countries across the world.

Despite it being a quiet week on the economic front, political events are likely to make big headlines, with Brexit and Trump’s trade saga continuing, the currency markets are likely to be as volatile as ever.

If you are planning any transactions next week, these are events that you will want to consider. Contact Currency UK for more information.