The week ahead
- Posted by currencies in Bank of England, Brexit, Currency, Dollar, Economy, EUR, GBP, Sterling, UK, Uncategorised
- December 11, 2017
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GBPEUR exchange rates hit 1.1490 while GBPUSD exchange rates went above 1.35 on Friday morning following the UK Government managing to sort out the Irish border issues and beginning negotiations for Brexit.
These exchange rates lasted around 2 hours until EU officials stated that trade negotiations could not officially begin until Brexit was done (2019) which caused a 2% Sterling sell off through Friday afternoon.
Before I go any further- this is the exact reason many of my clients use limit orders and stop losses with me- many of my clients who are in the process of purchasing property had orders in at 1.1480, and though the exchange rates weren’t there for long- their orders executed and they managed to get this exchange rate, I say that to say this, if you are waiting for these buying opportunities, ensure you are using the correct financial tools to ensure you can take advantage when the opportunity presents itself.
Moving onto this week’s economic figures; we are not expecting things to get interesting until Tuesday when the UK releases inflation data for November- we are expecting a slightly stronger figure of 0.2% which could potentially give a little boost to the Pound, inflation has been a big indicator for the UK this year and I think it will continue to be through 2018.
On Wednesday, the UK will release jobless claims figures followed by average weekly earnings (Expected stronger), if this is the case then the Pound should have another good day (For at least the morning).
Also on Wednesday evening, the Fed will have their final interest rate decision of 2017- there has been much speculation about whether they will hike this month or not due to inflation pressures in the U.S- however, the expectation seems to remain that they will hike their rates by 0.25%.
Usually, this would strengthen the U.S Dollar, so if you are trading GBPUSD this is one important event to look out for, the rates are currently pretty good and this hike could affect current prices, if you wish to look at contract options such as forward contracts please contact me for a full review of your circumstances so we can identify what would be best for you.
On Thursday, the Bank of England will release their interest rate decision (No change expected)- however markets will be watching Mark Carney’s speech following the decision to hear his views on the UK economy and monetary policy- this is likely to be a volatile meeting as markets are still unsure whether November’s hike was a good idea. Following this, the ECB will also have their interest rate decision- same situation- no change expected, but Mario Draghi’s speech will add volatility to the day.
This is likely to be a very volatile week with every major Central Bank meeting- so if you have requirements coming up and are unsure how to navigate your purchase, please don’t hesitate to contact us directly.
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