Pound sterling maintains its euro gains into the new week, but is a little weaker against other G7 rival currencies, such as the Japanese yen and Canadian dollar.
Against the US dollar, it’s a different story. The pound enters the week with less momentum and is down by just over 1 percent (1.25%) compared to this time last Monday. However, on a monthly comparison GBP/USD has strengthened by nearly half a percent.
This comes after economists continue to mull over a handful of economic releases — one being the UK’s latest GDP figures which revealed the economy grew by 0.1% in the first three months of 2023.
We’ve just seen Germany’s monthly and yearly wholesale prices plummet unexpectedly this morning. The monthly figures decreased to -0.40, while the yearly prices were down by half a percent. Both results were lower than market expectations.
There are lots of high-impact data releases scheduled in this week, that could trigger further volatility within the currency markets. This includes an insight into the UK’s labour market, with the latest unemployment rate.
Investors across the globe will also be tuning in to Friday’s speech from the US Federal Reserve’s chair, Jerome Powell. Powell’s comments could have the power to move the dollar against its rivals — albeit in any direction. To protect your business against further volatility, book a forward contract with Smart.
Dollar watchers will have three key speeches to listen out for over the course of today. The first will be from president of the Federal Reserve Bank of Atlanta, Raphael Bostic, at 1:45pm, UK time, while the second will be from president of the Federal Reserve Bank of Minneapolis, Neel Kashkari, at 2:15pm. The last Fed speech today will be delivered by the CEO of the Federal Reserve Bank of Richmond, Thomas Barkin, at the end of the business day.
The speeches follow a poor performance from US equities on Friday. The S&P 500 and Nasdaq 100 both finished in the red, losing 0.1% and 0.3%, respectively. This came as investors assess pressures caused by an unexpected rise in long-term consumer inflation expectations and ongoing worries about the debt ceiling — a limit that US Congress places on the amount that the federal government can owe.
European equities on the other hand, ended last week on a positive note. The benchamrk Stoxx 600 was up 0.4% and the German DAX rose by half a per cent. This was boosted by several factors including upbeat corporate updates. One example is the luxury sector, which received a boost after Richemont exceeded profit by +3.5%.
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