Excel Currencies Blog

It was another 'hurtful' week for Sterling sellers as £-€ lost over 1% with £-$ losing 1.5%. The falling core inflation rate in the UK was enough for the BoE to pause its hiking interest rate cycle, which means good news for consumers, but bad news for the Pound. 

Friday's services PMI data didn't help matters with the result missing estimates by some distance (47.2 v 49.2). As a services nation, this was a bad reading especially as the previous month was relatively consistent at 49.5. This week, housing data is the only thing of note which is likely to be negative as the UK is in the midst of a market downturn.

A sitting duck scenario can sometimes work out favourable for a currency, but we expect GBP will remain under pressure for the remainder of the month. 


EUR
The Euro-Zone fared much better with the PMI's last Friday, which saw Germany beat consensus on their figures for the first time in a while, to signal things are slowly starting to improve. This week, inflation data is the key market mover and the Euro-Zone is involved in the release. It's a 50-50 call on how the single currency will perform this week.


USD
It has now been 11-weeks of relentless pressure against the US Dollar for the Pound and there is little to suggest that trend is going to change. In fact, some analysts have brought forward their expectation of 1.20 mid-market by at least 1-month.

King Dollar is dominating everyone in the G10 at the moment and the issue is no-one knows how long the assault will carry on for. This makes it hard to predict how much lower £-$ could potentially go and so if hedging hasn't been done yet with anyone trading the pair, now looks like it could be your last chance before it really gets bad..