Even the interest rate decision from the Bank of England (BoE) on Thursday was unable to shake sterling out of the stability it’s held since the first week of January this year. The pound remains 2% up on last year against the euro.
To recap, the BoE held interest rates at 5.25%, but the strong suggestion remains that it will start a cutting cycle at its next meeting on 20th June.
In the meantime, the market should – in theory – be receptive to any indicators of whether that will, in fact, happen. And not just here, but in the USA and Europe too, exchange rates being a matter of the interplay of all those economies.
There could well be movements around several key points this week. For the pound (GBP), tomorrow morning we have unemployment and earnings. Unemployment shot up last month, to 4.3%, and a similar number is expected this month. But what about earnings? Last month they were rising at close to twice the inflation level but seem likely to moderate this month.
The latest Jobs Report from KPMG and REC points out how successful the UK labour market is, based on flexibility and willingness to use new technology, but there definitely are more candidates available to companies now.
From the euro side (EUR), tomorrow there will be the ZEW Economic Sentiment Index for both Germany and the whole eurozone, with improvements in both expected. Then on Wednesday there is a mass of eurozone economic data for the markets to wrestle with.
The US dollar (USD) has a big week for data too, with comments from the boss of the US Federal Reserve Jerome Powell (always a potential market mover) tomorrow and then inflation on Wednesday.
To avoid any of that having an impact on your budget, pension payments overseas or any other movement of money across borders, please call your account manager on 020 8108 5163. They can set you up with a forward contract that fixes an exchange rate you’re happy with, or a market order or other product, that offers complete peace of mind, with you in control.
