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With a weak sterling being one of the main events over the last couple of weeks, it’s nice to see a little positivity in the UK; with data release on Friday showing the warm weather had boosted growth in the UK. This quarter showed an accelerated growth of 0.4% compared to the previous of only 0.2%. This growth is still reviewed as modest.
Turkey has been in the spotlight as Donald Trump has permitted the doubling of tariffs on the country. As we reported on Friday morning, the Turkish lira fell 18% in the space of 24-hours, along with Turkish stocks falling 8.8%. Erdogan spoke during the meltdown, asking for Turkish nationals to return savings to Turkish lira, only making matter worse.
Over the weekend, Erdogan has said that Turkey is in an economic war, as the lira slid further downhill. This led to contagion fears spreading to other emerging market currencies, with the South African rand weakening 10% against the strong US dollar.
In the pipeline for this week, there are a few key data releases that could arouse some interest, so speak to a member of our team today to de-risk your transfers, remove any uncertainty over future payments, and afford yourself peace of mind.
GBP: is the weather helping the UK as much as we think?
Sterling recovered slightly against the euro due to fears related to the situation in Turkey, whereas, the pound saw a continued negative trend against the dollar.
Tuesday will commence the week with UK’s average earning over the last three months being published. We are expecting an increase of 2.5%, and it is within reach, looking at previous results. Consumer price index is in the pipeline for Wednesday, with a projection of 2.4% compared to the previous release of 2.5%.
EUR: a chance for recovery
The euro suffered losses against key currencies due to the strong inductive effect of the Turkish tariff hike. Could the euro distance itself from the negativity and return to the levels previously seen?
With very little news with respect to the euro and the eurozone, the single currency will likely move as subject to influences from elsewhere across the globe.
Investors may bookmark next week’s ECB meeting minutes as a key release as the search for clues continues as the next pinnacle central bank decisions are made.
USD: retail and oil inventories
The dollar remained the global anchor point of the world, as growing fears showed increased investments and, therefore, an increase in value.
As the first and primary brand consumer, focus will be given to the US retail and core retail sales data this week, currently expected to show a small increase of 0.4%. Outside of this, we will see the release of crude oil inventories and building permits data.
After Donald Trump imposed tariffs and sanctions on Turkey and Russia, respectively, we shall see the outcomes unveil and the true repercussions of his actions.
For more on currencies and currency risk management strategies, please get in touch with your Smart Currency Business trader on 020 7898 0500 or your Private Client trader on 020 7898 0541.
