Excel Currencies Blog

'PMI Tuesday' to dictate the performance of the Pound this week...

Sterling versus the Dollar remained flat last week, but slipped 0.7% against the Euro. The fall against the single currency came initially from Septembers' UK retail sales number. -1.2% was realised (after a -1.3% reading the month before), which ended up being a huge miss on the -0.2% forecast.

The UK economy then still shows signs of decline and this latest figure clearly proves the cost of living crisis is continuing to weigh on the public. The UK confidence reading also missed estimates and is one to watch in the near-term. 

Shortly after, BoE Governor Bailey compounded the loss with comments that firstly he was 'encouraged' by the latest inflation data and then that he expects a 'real decline' next month. Lower inflation is consumer positive, but GBP negative remember and so with it seemingly under control, there is no need to raise interest rates. 

The UK release only one important bit of economic data this week and it's likely to hurt the Pound further, especially if the EU & US do better than expected..


EUR
It was a good week overall for the single currency gaining at least 0.5% across the board, even though there was nothing of note being released from the region (as is the way more often than not for the EU). This week, they are in the thick of things and deliver some heavyweight figures that will no doubt create a volatile week.

They start with confidence & PMI data that are must watches to see if the economy as a whole is improving. Then Thursday's interest rate decision and meeting after will be crucial to end the week, mainly to see if the ECB throw any spanners in the works as they sometimes do..


USD
It was a rather quiet week for the Dollar last time out that is neither here nor there in terms of a trend change. All roads still point to USD market dominance near & long term and things may get back on track this week. PMI, jobs, PPI & GDP releases are all potential market movers and so £-$ customers should be aware of some volatile movements this week.