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
In recent weeks, the pound has gained ground on growing hopes for Britain’s economic recovery, while the euro surged on the EU’s agreement of a €750 billion recovery fund.
The GBP/EUR exchange rate dipped from highs of €1.11 to lows of €1.09 while the EUR/GBP rose from £0.90 to £0.91.
Meanwhile, GBP/USD rose from lows of $1.25 to highs of $1.28, while the EUR/USD soared to around $1.17.
What’s been happening?
EU leaders reached an agreement on the €750 billion Covid-19 recovery fund at the start of last week, pushing the euro to multi-month highs on hopes of recovery and further fiscal integration.
Meanwhile, the US dollar suffered from a mixture of improving risk sentiment on coronavirus vaccine hopes and concerns over the US’s recovery. With US unemployment continuing to rise and home sales falling, causing USD investors to be skittish.
The pound tempered losses against the euro and made gains against the US dollar at the end of the week due to improved economic data. Stronger-than-expected retail sales for June and a rebound to a five-year high in private sector activity offset the latest Brexit concerns.
What do you need to look out for?
With the lack of notable UK economic data this week, the pound may struggle to find much upward momentum, and instead be driven by Brexit uncertainty, coronavirus developments and shifts in risk appetite.
Important UK economic data follows at the start of August, with the Bank of England’s interest rate decision and second quarter GDP figures, which will likely drive volatility in the pound.
Wednesday’s US Federal Reserve interest rate decision, which is expected to hold at 0.25%, will drive the US Dollar (USD) this week.
However, if the Fed is notably dovish in its statement, we could see the ‘Greenback’ benefit as concerns grow for the world’s largest economy, which could be confirmed by several economic data releases.
Euro traders will be looking to the end of the week to growth data. Germany releases its GDP data first followed by the Eurozone, with both expecting double-digit year-on-year contractions, which will potentially weigh on the euro.
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