Currency News - Important Week Ahead

GBP: May hike now in doubt

It just shows how quickly things can change. Before last week the Pound was riding high piercing 1.15 against the Euro and 1.42 against the Dollar as investors priced in an 85% chance of a May rate hike from the Bank of England.

But after a bout of bad news and some rather dour comments from Mark Carney, all of a sudden the odds have plummeted to 50%. As such, Sterling took a tumble last week and has lost its upward momentum.

Two of the other BoE policymakers are giving speeches today. Investors will be watching to see whether they are softening their stance too.

EUR: Important week ahead

This week is critical for the Euro.

In recent weeks the economic news coming out of Germany has noticeably declined. This has confused investors as the EU was thought to be in a strong recovery phase, which had fuelled talks of the European Central Bank (ECB) perhaps raising rates later this year.

That looks highly unlikely now, but on Thursday this week the ECB has its monthly rate meeting, so investors will get a direct response on how the ECB views the recent data.

Today we have a bunch of PMIs for the Euro-Zone, Germany and France. These are good indicators of business confidence.

USD: Finding support?

After a horrible start to the year, the Dollar found some support last week. In fact, it hit its highest level since the 9th January as measured against a basket of 16 other currencies, including strong gains against the Pound and the Euro.

The US economy is in pretty good shape and the Federal Reserve has indicated that further rate rises are coming this year. So in the absence of any political events, there is a strong case to see a Dollar comeback.

Like the EU, the US also has PMIs due out today. Flat readings are expected.

Thanks For Reading, What Next?

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Have a great day,

Geoff Lambourne - Direct Dial me on 0044 (0)1872 487 470.

Current rates:

Monday 23rd April 2018 at 10:55

£1.00 GBP = 1.1416 EURO

£1.00 GBP = 1.3960 USD

£1.00 GBP = 1.8282 AUD

£1.00 GBP = 1.9459 NZD

£1.00 GBP = 1.7873 CAD

£1.00 GBP = 17.1134 ZAR

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