Sterling
Sterling had a difficult week last week, initially gaining ground but then struggling in the second half of the week. Against the US dollar on Friday it fell to 1.6020 having gained and then lost over three cents during the course of the week. Weaker than expected Services Purchasing Managers Index (PMI) data released on Friday, the first contraction in 2 years when a slight expansion had been expected, likely drove the decline given how significant the services sector is to the UK economy. Furthermore, more weak data was released in the form of the supply of money and the net lending to individuals. We are likely to see some volatility in the back end of the week as three important releases are made. On Thursday, following the Bank of England meeting, an announcement on quantitative easing and interest rates will be made. No change is expected in either. On Friday we will see the release of monthly Manufacturing data which is forecast to show a swing to the positive for the first time in four months, if so, this could well drive some value into the struggling pound. Get in touch now for an up to the second exchange rate.
Euro
After a poor week, it was a broadly strong day on Friday for the Euro. While it hit a three week low against the dollar in the early morning, the tide turned on the negative trend of the week with rates picking up across the board as Europe wide Services purchase managers indices (PMI) data came out as expected, with the Spanish and Italian readings slightly better than forecast. In a week that doesn't see much influential data released, the biggest news comes on Thursday as the European Central Bank announce, then hold a press conference on, their interest rates - the most fundamental factor in currency valuation. Any change to the rate is extremely unlikely, so markets will react dramatically if anything does change. Get in touch now for the latest news from the weekend, and the most up to date rates. The US dollar started Friday in the ascendency, strengthening against all of its major peers following the release of the Federal Open Market Committee meeting minutes on Thursday. The minutes revealed that several members suggested that they wanted to tighten monetary policy at some point in 2013 as they feel the effectiveness of continued loose monetary policy dwindles. In fact there is a fear that extending it could be inflationary. The US dollar struggled to keep up this momentum in the afternoon following data showing the overall unemployment rate rose from 7.7% to 7.8%. Furthermore, the highly influential Non-farm payrolls data came out slightly better than expected; but, disappointed many traders who were hoping for a big jump following Thursday's positive payrolls release. In other news, Services Manufacturing PMI came out much better than expected. It is a fairly quiet on the data front this week with Trade balance data released and the weekly release of the change in the number of people claiming unemployment benefits is also announced. The dollar is performing well following a poor start to the week, call in now to see if the trend will continue.
Elsewhere, the Japanese yen was once more the worst performing currency yesterday, weakening to its lowest level against the US dollar since July 2011 on what is its longest losing streak for 24 years. Canadian employment data released was much better the than expected with an additional 39,800 employed compared to last month when only an extra 4,000 had been anticipated; moreover, the overall unemployment rate dropped from 7.0% to 7.1%. Out this week we have a raft of data released; including Trade balance data from China, Australia and Canada. Other data out from China includes Manufacturing PMI and inflation data; Australia sees additional retail sales and building approvals data; Canada also announces building permits figures; Swiss inflation data will be produced and Japan will release its current account figures. Call in now for the latest news and to get a live price.
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