After the GBP/EUR exchange rate fell by a cent on Friday it looks like there could be even further volatility expected this week. The G20 meeting in Hamburg appears to so far have been a fairly passive non-event with the likes of Trump and Putin seemingly getting along. Whilst I don’t think anyone was expecting a boxing much to take place, they seemed comfortable around each other. However the summit is on-going so there is always time for developments.
The week ahead
Sterling exchange rates
The main event the for the UK currency this week is the Inflation report hearing on Tuesday morning. This was expected to be released last week however it has been postponed. The release will now come a day before Average Earnings on Wednesday which could have major significance. If inflation looks set to rise and average earnings are dropping or static then consumers will feel the pinch.
Most importantly from Sterling’s perspective is that a rise in inflation could bring an interest rate rise from the Bank of England. When there is a rate hike the host currency can gain several cents against all currencies.
US Dollar exchange rates
This week the USD has a fairly low key mix of data until Friday when Fed Chairlardy Janet Yellen will testify in front of Congress. This will provide an insight into the US economic conditions and the thoughts of the members who vote for the US interest rate movements.
Euro exchange rates
There is also quite a limited amount of data out for the Eurozone however there is data for the individual countries within the group. There’s a broad array of production data through to consumer confidence all of which can have some form of effect on the market. Industrial Production data will be released around lunchtime on Wednesday, which is likely to be the most significant for the Euro this week.