Sterling
Sterling had a relatively positive, if quiet end to last week as it strengthened to a six week high against the US dollar to rise above 1.53 on Friday afternoon, whilst seeing little movement against the euro. The UK's economic calendar is much quieter this week, with the main releases coming on Tuesday in the form of the influential monthly manufacturing data whilst Trade Balance figures will also be announced. The Bank of England voted to keep quantitative easing on hold last week, but speculation regarding future loosening of monetary policy is still rife. On-going speculation regarding further easing will continue to effect sterling’s relative strength on a continuous basis, whilst data released this week may cause more of a knee-jerk reaction in the market. Call in now for live rates and up to the minute information.
The euro climbed to a 1 week high against the US dollar on Friday after a string of poor unemployment data was released from the States. This move came in spite of a raft of negativity across Europe which included data revealing that retail spending had contracted earlier in the year, final GDP figures portraying a 0.6% contraction in the eurozone as a whole and the ECB declaring that commercial banks would be obliged to repay over 8 billion euros of the three-year loans this week which is likely to put a dampener on the forecast for growth as Europe confronts more restrictive credit conditions. Despite earlier signs of economic stability, German Factory Orders remained on a downward trend and decisions on further bailout funds for Greece are expected to be postponed. On this note, the ECB may well look to lower interest rates as the deep-rooted recession yields more price volatility, and indeed the single currency may struggle to hold its ground as the outlook remains gloomy. The main events this week will be the Eurogroup and ECONFIN meetings on Friday and Saturday respectively, where the proposed banking union will be one of the main topics of conversation. We will also have the ECB's monthly bulletin which will provide further insight into the central banks current view on the state of the economy, French and German industrial production data and an Italian 10-year bond auction. Call in now for the leanest update on the euro.
The US dollar suffered badly on Friday on news that the employment market produced just 88,000 jobs through March; under half of forecast expectations causing the currency to drop starkly in comparison to its euro and sterling counterparts, though it still held against the yen as Japanese quantitative easing further undermined the strength of the currency. Further concern was caused by the news that labour participation sank to its lowest level since 1979, with half a million having left the workforce although the overall unemployment rate did drop to 7.6%. This week, the main focus will be on the Federal Open Market Committee's meeting minutes released on Wednesday where we will see how the central bank came about its decisions at the mast meeting. Furthermore, the minutes can often indicate when a change in policy may be likely - however, following last weeks terrible labour data, the chance of monetary policy being tightened in the near term has been significantly lowered. Other data out of the states includes, consumer sentiment statistics, inflation related data and retail sales figures. Call in now to speak to your trader and for the latest market information.
Worldwide
Friday saw the Canadian dollar's worst day for nine months through a combination of disappointing monthly employment statistics and weak trade balance data having been released. This week however there may be some chance of recovery with important building permit issue data being released on Tuesday. The Japanese yen continued to tumble on Friday following last weeks decision to implement an ultra-loose monetary policy in order to drive up inflation, furthermore, the yen will continue to be watched closely this week and overnight we saw the release of Japanese current account figures. It is a busy week for China with inflation data and Trade Balance statistics due to be announced on Monday and Wednesday respectively. Not only will these figures decisively influence the relative strength of the Chinese renminbi, but also in turn have an notable effect on all commodity-backed currencies due to China’s influence on the market as the world's biggest manufacturer. Other data released this week includes business confidence data from New Zealand and labour data from Australia. Get in touch for the latest rates.
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