Staying on top of the latest currency news can help you time your transfers more effectively, so find out what you should be looking out for over the next couple of weeks…
Latest currency news
Over the last fortnight the pound to euro exchange rate has been fluctuating between €1.15 and €1.16 due to uncertainty surrounding Brexit and December’s UK general election.
Meanwhile, the EUR/GBP exchange rate remained steady at around £0.86 while GBP/USD fluctuated between $1.28 and $1.30.
What’s been happening?
Sterling experienced a lot of volatility last week after Labour leader Jeremy Corbyn announced that the Labour Party would back a general election, which provided the necessary support for Prime Minister Boris Johnson’s bid for a pre-Christmas poll to make it through Parliament.
UK markets remained cautious however, as Brexit developments have been put on pause for what is expected to be one of the most divisive general elections in a generation.
However, the euro has also been under pressure, with Germany’s flash Markit Manufacturing PMI coming in below forecasts at 41.9 and further fuelling fears that the Eurozone’s powerhouse economy could be facing a recession in the near term.
However, the euro was also feeling the pressure as the Eurozone’s economic woes intensified last week, with several sub-par data releases adding to concerns that the region is experiencing a prolonged slowdown.
The US dollar, meanwhile, weakened in response to the Federal Reserve’s latest interest rate announcement. While a rate cut had been long expected, the central bank was more dovish than forecast.
What do you need to look out for?
Tuesday will see the release of the UK’s Markit Services PMI for October, which is expected to remain mired in contraction territory at 49.7. However, any surprise improvement could buoy Sterling as growth in the UK’s largest sector would provide some confidence in the economic outlook.
Meanwhile, US Dollar investors will be looking ahead to Wednesday’s release of the preliminary nonfarm productivity figure for the third quarter, which is expected to come in at 0.9%.
This week will also see the Bank of England (BoE) announce its latest interest rate decision.
No change in interest rates is forecast but any dovish commentary from Governor Mark Carney could apply downward pressure on the GBP/EUR exchange rate.
British political developments will also remain in focus, with the pound potentially climbing if the Conservatives remain ahead in the polls.
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