GBP/EUR and GBP/USD currency forecast

ECB to announce extended QE soon?

The first full week of trading in 2015 has been completed and we have learned slightly more about the intentions of the European Central Bank (ECB).

Reports were released last week that staff from the ECB have presented policymakers with various quantitative easing (QE) options, with as much as 500 billion euros being made available to help rejuvenate the Eurozone economy – heightening expectations that a programme would be announced officially at their first meeting of 2015.

However, upon release of this news, we did not see rates move dramatically; arguably analysts and investors have been anticipating such a policy move, with numerous commentators calling for an expanded QE programme.

EUR

 

Here in the UK, we had trade balance numbers and manufacturing production figures released, with both coming in above the expected forecasts. These figures relieved some concerns that the UK economy was stalling and the pound strengthened against the dollar, climbing from a near 17 month low.

USD

 

Across the pond we had both non-farm payrolls and unemployment rate changes beating forecasts once again, with the US adding a further 252,000 jobs and unemployment dropping to 5.6%. Michael Feroli, chief US economist at JPMorgan, commented that “it shows really solid momentum in US growth. There are not a lot of places in the world where we see that these days.”

If we continue to see strong data from America, calls for an interest rate rise will become stronger, increasing the pressure on Fed chair Janet Yellen to take action.

The week ahead

Monday is a very quiet day on the data front, with the only release of note coming courtesy of a speech in Atlanta from FOMC member, Dennis Lockhart. After Friday’s positive data releases Lockhart argued there is no need to speed up the timing of an economic policy shift, but did view the figures as healthy.

The rest of the week consists of CPI figures from both the US and UK, with the US expected to meet forecast and the UK coming in under expectation. Get in touch with us here at the Foremost Currency Group to speak to an account manager who can help you navigate the markets and ensure you make the most of your currency.

 

Kingsley Walker

+44 (0)1442 892060

[email protected]