UK | Sterling
GBP – May travels to Brussels to unlock 'deadlock'
Last week
-The pound experienced some adverse Brexit movement last week, mainly after Phillip Hammond reiterated the risks of Brexit, and chief EU Brexit negotiator Michel Barnier stated that a ‘deadlock’ had been met over how much the UK will pay when it leaves.
-The pound managed to retrace its losses towards the end of the week after German newspaper Handelsblatt reported that Barnier could be prepared to offer Britain a two-year transition period. GBP/USD rallied over 100 pips.
-UK industrial production jumped from 1.1% to 1.6% on the year in August, manufacturing production rose from 2.7% to 2.8%, and construction output climbed from 2.7% to 3.5%, despite forecasts for weaker numbers.
-The Bank of England (BoE) reported that UK banks would be tightening their lending availability in coming months as Britain’s debt levels reach concerning highs.
-Additionally, the Royal Institute of Chartered Surveyors (RICS) noted that the UK housing market had experienced a month of weakness in September.
Week ahead
There could be a few swings in the GBP exchange rate this week with some important events taking place. Tuesday could be a particularly exciting day with Bank of England Governor Mark Carney appearing before the Treasury and testifying to lawmakers, amid UK inflation data being published. The annual consumer price index figure is expected to climb from 2.9% to 3.0%, with September marking 0.3% growth. If the data prints in line with forecasts, UK inflation will reach a five-year high, adding further pressure to the Bank of England to hike interest rates. Meanwhile, Wednesday will see UK labour market data published, such as unemployment rate and average weekly earnings figures. UK retail sales will follow on Thursday, and public finances figures will be out on Friday. Additionally, any developments in Brexit could create some GBP movement. Theresa May will be meeting with EU negotiators on Monday to try and unblock the current situation in the hope of progressing to trade talks soon.
Europe | Euro
EUR – Markets eye Catalonia and Austria developments
Last week
-The euro reached a two-week high versus the US dollar (EUR/USD) last week after some positive ecostats from the currency bloc emerged supporting speculation that the European Central Bank (ECB) will soon begin tapering its quantitative easing (QE) programme. The euro posted its most impressive weekly rise in over a month.
-ECB President Mario Draghi poured cold water on hopes from Germany that the central bank would be increasing interest rates, saying they’d remain at their current levels ‘well past’ the end of the QE programme.
-Catalonia situation continued to cause concerns in the market.
Week ahead
This week could be fuelled by politics as markets wait for the outcome of Catalonia’s bid for independence and investors digest the results of Austria’s election. The German and Eurozone ZEW surveys are out on Tuesday which could create some substantial EUR exchange rate movement. European Central Bank Chief Mario Draghi will also speak in Frankfurt on Wednesday, and his comments could be highly influential on the single currency. The second half of the week is quiet regarding economic data, so the euro is likely to react to events elsewhere.
USA | US Dollar
USD - US inflation falls short for sixth time in seven months
Last week
-US inflation data disappointed last week; the consumer price index reached 2.2% in September on the year, failing to reach the forecast 2.3%, while the core figure stagnated at 1.7%. This is the sixth time in seven months that US inflation has fallen short of expectations causing speculation to rise over whether the Federal Reserve will hike interest rates once again this year.
-US advance retail sales also came in below forecasts at 1.6% rather than 1.7% in September.
-Consumer sentiment in the US made a surprise surge to a 13-year high in what’s thought to be a reflection of falling petrol prices after recent hurricanes created a jump in costs.
Week ahead
Friday could be an interesting day for the US dollar when Federal Reserve Chief Janet Yellen discusses monetary policy since the Global Financial Crisis (GFC). There are a host of medium-tier data releases due out, but none of high importance this week. Any developments in politics or escalation of tensions with North Korea are likely to impact US dollar movement, so investors will be watching broader events while the data calendar is light.
Other
Japanese yen – All eyes on the election
The yen is likely to fluctuate on political developments in the next few weeks as investors prepare for the 22nd October snap election. The election will play a critical role in determining the nation’s economic policy, and some recent polls have suggested Prime Minister Shinzo Abe is likely to strengthen his hand by calling the vote. Last week the Japanese yen managed to attain its strongest level in two weeks versus the US dollar (JPY/USD) after polls suggested Abe’s chances of maintaining his dominant position were looking positive.
Canadian dollar - Inflation forecast to jump
The Canadian dollar exchange rate may experience some positive movement on Friday if the latest Canadian inflation figure falls in line with expectations. The annual inflation number is expected to jump from 1.4% to 1.7% in September and may cause speculation regarding the Bank of Canada’s (BoC) next interest rate increase to rise.
Australian dollar – Labour market data in focus
The Aussie dollar was offered some positive news last week following upbeat ecostats from Australia’s largest trading partner, China. Chinese imports managed to rise to 19.5% in September on the year, ignoring forecasts for a smaller increase to 16.5%. Chinese growth numbers are due out on Thursday and may give the Aussie some further opportunity to move. Meanwhile, the Aussie could be in for some interesting movement this week with the release of Australian labour market data on Thursday. The unemployment rate is forecast to remain stable at 5.6% in September, while the employment change figure is expected to come in at 15.0K.
Swedish Krona - Rate hopes dwindle
Last week the Swedish Krona fell against the pound after Swedish inflation data showed consumer prices had failed to climb as expected. Investors sold off the SEK as they priced out the possibility of shifts to tighten monetary policy.
Current rates:
Tuesday 17th October 2017 at 09:15
£1.00 GBP = 1.1280 EURO
£1.00 GBP = 1.3281 USD
£1.00 GBP = 1.6904 AUD
£1.00 GBP = 1.8501 NZD
£1.00 GBP = 1.6643 CAD
£1.00 GBP = 17.6752 ZAR
Just imagine if YOU could forecast the exchange rate?
No one can do that of course but being well informed is a good start and knowing the events coming up that may influence the exchange rate may help you with your planning.
The latest quarterly currency market forecasts from the international money transfer experts, FC Exchange, are now available. The reports are essential reading for anyone buying or selling a property, in fact anyone making international money transfers.
The currency markets will always fluctuate, but last year saw unprecedented levels of volatility. The currency forecasts review the factors that have contributed to the uncertainty we have seen and look ahead to the issues that could affect currency markets in the next quarter and throughout 2017.
Grab your Free Report here...
Do you want more information ?
So if you need to buy or sell sterling and would like to be kept up to date with all the latest data releases and exchange rate movements then feel free to contact myself Ben Amrany. If you are buying or selling a house in France we will make sure your monies are in the right place at the right time, we work hand in hand with you and Cle France.
For more information on the currency service I can provide please feel free to contact myself...
Ben Amrany from FC Exchange follow this link or phone and ask for myself and quote "Cle France" on 020 7989 0000.
You may contact me directly using this form (click here) with your requirement and I will explain the options that are available to you in getting the best exchange rate.
For everything you need to know about French property visit www.clefrance.co.uk
