After a wobbly start to 2017 Sterling remains at elevated levels against all currencies, well above the lows seen back in January. With Article 50 set in motion, sterling has found some more stable ground but can this really last? The data this week showed a mixed bag with Manufacturing and Construction slowing whilst the Services sector improved.
Markets are now keenly analysing the upcoming data for clues to the effect Brexit has had on the UK economy, the remaining news this week could easily change the picture.
The focus on data continues tomorrow morning with a flurry of Manufacturing and Industrial production data, along with Trade Balance figures for the U.K. Then in the afternoon the latest GDP (Gross Domestic Product) estimate for the UK is released by the NIESR. Whilst we should now find economic data a much more important driver of exchange rates it will, of course, be very easy for the uncertainty of Brexit to once again creep back into the market via an unexpected headline or announcement.
Further important news tomorrow is the release of the latest Non-Farm Payroll and Unemployment data in the United States which can be a big mover for all major currencies due to two matters. Firstly, the predictions for the figure can be widely wrong, leading to an instant market correction and secondly when the figure is actually released it can have an impact on global attitude to risk. This can move the perceived riskier currencies such as the Australian dollar, New Zealand Dollar and any currency pegged or related to the US dollar.
From any resulting big swing on the US dollar, it is not at all unusual to also see GBP/EUR higher or lower as a result too as Sterling and Euro traders adjust their US dollar holdings.
Our dealers have been working here for an average of 8 years and can offer you real expertise and guidance in the planning and execution of your currency transfers.
In the absence of hard facts on Brexit, markets are taking more notice of the economic data which is leading to some unexpected volatility which could affect exchange rate. All in all, we have a very busy little period with plenty of potential for some movement on the rates,