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Despite some early spikes in trading, Monday saw the pound, dollar and euro end much where they began. The euro was very slightly ahead of both, up by 0.17% on the dollar and 0.01% on the pound.
There was a lot more activity on the stock market, as news that Iran was seeking a ceasefire with Isreal sent the FTSE 100 to a near record high.
In good news for the pound ahead of Thursday’s Bank of England interest rate decision, US president Donald Trump signed off the US/UK trade agreement. The contract marks the first trade agreement the US has completed since the start of its president’s trade war in April.
It’s a big week for the pound. As well as the interest rate decision on Thursday – which is currently forecast to hold at 4.25% – Wednesday sees the release of new inflation data. Between these two economic moments, the pound could see a lot of volatility.
The US has a similarly filled week ahead. Today new data on retail sales, imports, exports and industrial production will be showing the impact of Trump’s trade policies. Then, on Wednesday, along with more economic data, the Federal Reserve Bank will announce its own interest rate decision.
Trump has been pushing Fed chair Jerome Powell hard to make a 1% cut but he is predicted to resist the pressure and hold the rate steady at 4.5%. The last time Trump picked a public fight with Powell, his threats to remove the chair from his position caused a panic in the markets, so the dollar may well move significantly this week.
Europe may not have an interest rate decision this week, but with multiple economic and industrial data reports due to be published in the coming days, the euro will not only be driven by what happens to the pound and dollar.
Later this morning, for instance, Germany’s Centre for European Economic Research will publish its economic sentiment index. The report will show how Europeans feel about the markets since the ECB cut interest rates and got inflation below its 2% target. It’s forecast to show a rise in positivity – in contrast to the US and UK.
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your Business Account manager on 020 3918 7255 to get started.
GBP: Holding steady ahead of Bank’s decision
There was little movement in the pound on Monday, ending the day almost where it started against the dollar and euro. However, that could all change with the Bank of England’s interest rate decision coming on Thursday.
GBP/USD past year
EUR: Slightly ahead again
The Euro continues to climb against the pound and dollar, if even only slightly. Later today, fresh survey data will reveal Germany’s economic sentiment, and it’s predicted to be positive – a marked departure from the US and UK.
EUR/USD past year
USD: Big week for the dollar
The dollar slightly dragged behind the pound and euro on Monday, ending just short of the two currencies. With multiple data releases today and on Wednesday forecast to paint a declining picture of the US ahead of the Fed’s interest rate decision the dollar may make significant moves this week.
USD/GBP past year
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