Excel Currencies Blog

Firstly to say it would have been nice writing this after an England victory and sore head, but it wasn't to be (again) and instead I have neither..

Anyway, the Pound continues to march on and gained an 'easy' 0.5% versus the Euro & a whopping 1.3% against the US Dollar last week. According to the charts, Sterling is now 'officially' in overbought territory and is trading above the high trading range. 

It feels like both a matter of when and by how much GBP falls, instead of any talk of further upside. That's not to say more gains couldn't be made this week though, as there is a very real chance there could be with the data on offer..

First up for the UK is the inflation print and if the result/s comes in lower than expected, we could see a GBP sell-off. This is because headline inflation is already at the BoE target and as many economists are already predicting an interest rate cut next month, this could cement the call.

Next is UK labour data, where average earnings is expected to fall with the jobs figures remaining settled. Finally, the confidence and retail sales releases could aid Sterling if they arrive at consensus.

A tough looking week to navigate then, but regardless of what happens, the Pound is currently flying high!



EUR
The main release out of the Euro-Zone this week is the ECB interest rate decision and following press conference. The former could be a non-event, as most analysts are not predicting another interest rate cut this month. For the latter though, we are hoping to hear of future guidance on interest rates and so will be a must watch event..



USD
The headline from the weekend was the disgraceful assassination attempt on former US President Donald Trump's life. Trump was leading the polls both before and after the recent President Biden's 'hiccups'. But this event looks to all-but confirm Trump as the winner come November 5th.

It's often touted that a Trump win = A stronger Dollar. This is because Trump is unpredictable and markets do not like uncertainty. Greater geopolitical risks mean harder to predict forecasting and this benefits the USD as a safe-haven currency. 

Fun fact, since Trump & Biden took power in the US, GBP v USD hasn't traded over 1.44. This was a rate that the pair was hardly ever below the 5+ years previous.