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Sterling had a tough start to the week against the euro following last week’s below forecast data releases in the form of industrial and manufacturing production. For the past few weeks GBP/EUR has been fairly flat at €1.14. Following the poor data on Friday we have seen the GBP/EUR cross fall to the €1.13 level. It looks like we could be entering a period of higher volatility.
Below is a list of the data that could move the cross for the remainder of the week.
Tuesday – There are no high impact data releases set to be published from the UK, however, at 11:00am there will be a speech from BOE MPC member Haldane followed at 12:00pm by a speech from MPC member Broadbent. Both of these speeches will be scrutinised by investors and traders alike to see if they drop any subtle hints toward the current monetary policy of the UK. Any news surrounding interest rates hike could have the potential to move GBP crosses.
Wednesday – At 09:30 there will be a high impact data release form the UK in the form of the latest average earnings index from the ONS, it’s a leading indicator on consumer inflation and with a forecast of 1.8%, any deviation from the forecast could cause volatility. We have two pieces of mid impact data to follow from the UK with both the claimant count change and the unemployment rate.
Thursday – With one piece of mid impact data set be released from the UK in the form of BOE credit conditions survey, volatility could be fairly limited. Most movement throughout the day is expected to be caused by data from across the pond with the US PPI, Unemployment claims and a speech from Fed chair Janet Yellen.
Friday – To end the week, there are no high impact data releases from the UK or the Eurozone but volatility is again expected to be caused by the States as they will publish their latest CPI, core CPI, core retail sales and retail sales figures.
With multiple pieces of data out that could cause volatility, it’s a great time to consider the different contracts we can offer apart from the standard spot contracts.
Forward Contract – Forwards have proved to be incredibly popular over recent times due the concern of the falling value of the pound. It allows you to take advantage of the current exchange rates. You can fix your price now for a transaction that will take place up to two years into the future, the contract is secured with a 10% margin against the total value of the trade. This is a great tool to help budget effectively and protect yourself against any adverse market movement.
Limit Order – This contract allows you to target a price that is not yet currently achievable. Once the market exceeds the desired level you will have the currency purchased for you automatically. This is particularly useful when market is moving in a positive direction for you.
Stop Loss Order – With a stop loss order you will instruct us to buy your currency if the rate falls to a predetermined level. You have the option if you wish to combine this with a limit order in order to hold out for a better price but protect yourself from potential fall in the rates.
Get in Touch
When exchanging funds, timing has a huge part to play in the return you will receive. Market volatility is caused by a number of factors, one being political uncertainty. When keeping in contact with your expert broker at Foremost Currency Group, we can act as your eyes and ears to help you to navigate the currency markets and tailor a bespoke strategy to help with both personal and business requirements. Whether you are looking to mitigate risk or take advantage of recent gains call us on 01442 892 060 or alternatively follow this link to open a free, no obligation trading facility today.
T: 01442 892 060