Sterling has launched into the week on the upswing, rising by close to 0.5% in minutes. It’s probably down to German economic data just out.
You can lock that in with a forward contract, with a call to your trader on 020 8108 5163.
This morning we’ll be seeing Purchasing Managers’ Index (PMI) data from the UK and across the eurozone and US. It’s an excellent measure of how businesses see the immediate future. So far we’ve had Germany’s and the eurozone’s, which has been extremely disappointing, well below market expectations, especially for manufacturing. The UK’s comes out shortly and the USA’s this afternoon and could easily affect exchange rates.
Indeed it’s going to be a busy week with lots happening. To give a quick run down: today it’s all about the PMI, tomorrow the focus is also on business optimism, especially in Germany. On Wednesday it’s the US Federal Reserve’s interest rate decision and on Thursday the European Central Bank’s, plus US GDP, and on Friday there are some important inflation readings.
Politics has also raised its head, with UK markets presumably beginning to consider the impact of a Labour government in 18 months, following the by-elections last week. On the other hand, Spain’s general election yesterday shows the risk of depending on any opinion poll, with their conservative party failing to win outright despite predictions that they would.
Why, indeed, have any decision depend on a forecast? Our own new Quarterly Forecast is fresh out, but please don’t rely on it for any business decision. One of the major banks we survey have sterling down at €1.09 by the end of summer. You can download it here.
