Excel Currencies Blog

Sterling had a good week last time out after suffering for the majority of April beforehand. £-€ recovered 1% and has importantly held its position over the weekend and £-$ clawed back 1.5%. But both currency pairs have very different forecasts from here..

Traders are struggling to see much upside in GBP  v EUR at the moment and its easy to see why. The pair has been oddly 'well-behaved' so far this year, barely drifting from an extremely tight trading range of 1.16-1.1750 mid-market. Anything above 1.15 is deemed favourable by most (especially compared to last year) and Sterling has comfortably and consistently been above this level most of the year. 

The problem is, September 2022 was the last time £-€ was any higher than it is currently. For the rate to go higher and consolidate there, it is going to need something special. If the ECB move faster than the BoE and by more on cutting interest rates, this could do it, but ifs and buts versus past performance will never win in this game..

With GBP v USD, traders only see downside. This is mainly down to how well the US is coping with higher interest rates, If the BoE cut interest rates before the Fed (now likely), we could eventually see the £ plummet to the 1.20's and beyond like we did in October/November last year. 



EUR
We have a 'super Tuesday' from the Euro-Zone this week which means we will likely see wild volatility on the day and days after. Because of the sheer number of economic releases and there importance, it's anyone's guess what happens to the Euro this week. 

The German data alone are market movers, but with EU inflation & GDP offered at the same time it could be fireworks..



USD
It's all eyes on the Fed this week to see firstly if they surprise markets with an interest rate cut (unlikely) and then to see if monetary policy stance has shifted (again unlikely). It could prove to be a bit of a non-event, but I wouldn't be betting on that to happen. 

The US also offers jobs, confidence and PMI data to ensure we are in for an intriguing start to May..