Investors had been eagerly awaiting the next mention of quantitative easing by the BOE and for the first time in a long time the news was fairly positive leading to huge gains across the board. Bank of England member Paul Fisher had written in his blog that the QE programme at present appears to be working - this led to gains of over 2% over the days trading against some currencies and at least 1.5% against most major currencies.
The pattern over the past few months for the Pound has been taking two steps forward then dropping three steps back as I’m sure many of you are aware, so if you do have an upcoming currency requirement it may be prudent to take advantage of this rare spike before Sterling even has the chance to drop away again.
Sterling forecast – Upcoming data worldwide
The Pound in general
Sterling is set for another extremely volatile week with a number of key releases due out – most important of all in my opinion being the Bank of England minutes due on Wednesday at 09:30am.
After Sterling’s positive end to the week all investors will be awaiting further information regarding Quantitative easing, and the BOE minutes will play a key part in providing more information as to what will happen next.
Should the minutes back up Fisher’s comments from last week Sterling may well continue its rally however should they play down the comments then the gains made at the end of last week may disappear sooner than a packet of chocolate digestives in John Prescott’s lounge.
Monday – Monday is relatively quiet on the data front with the main data release of the day being The Bank of Japan minutes late at night which could lead to Yen movements.
Tuesday – Tuesday sees inflation releases for both the Eurozone and U.S at 07:00am and 13:30pm respectively when they announce PPI (Producer Price Index) figures. Expect volatility should either release be different than predicted. The Canadian Dollar could also have a rocky day with the Canadian Interest rate decision due at 14:00pm – Although no change in rates is expected be aware of further economic releases.
Wednesday – As mentioned earlier in the report I believe this is the biggest day for Sterling followers barring surprises popping up like they have been of late. The New Zealand Dollar may have some movements in the early hours as credit card spending comes out at 03:00am and the Dollar completes the third key release of the day when the Fed announce their Beige book – a report on how their economy is fairing and how they plan to combat the current predicament, expect Dollar volatility.
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Daniel Wright
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