Update: Monday morning has begun with the Pound to US Dollar (GBP/USD) and Pound to Euro (GBP/EUR) exchange rates trading slightly higher. The US markets are closed today for the annual Presidents’ Day holiday, but trade deal optimism between the US and China has managed to push oil prices up to a three-month high.
Important meetings and calls on China Trade Deal, and more, today with my staff. Big progress being made on soooo many different fronts! Our Country has such fantastic potential for future growth and greatness on an even higher level!
— Donald J. Trump (@realDonaldTrump) 17 February 2019
It’s been a volatile week for the Pound, Euro, and US Dollar exchange rates and the week ahead could hold further volatility. Political developments will be ongoing as the half-term recess is cancelled for British politicians to try and break the Brexit deadlock, US-China trade talks resume, and US President Trump declares a national emergency to try and get Mexican border wall funding. Economic data will also print and influence the GBP/USD and GBP/EUR exchange rates.
Pound Sterling (GBP/EUR, GBP/USD) Exchange Rate Forecast
Monday will see the release of the UK Rightmove House Prices figure for February. January had come in at 0.4%, and given the Pound’s volatility this week, a lacklustre reading for February might put a little more pressure on Sterling.
Tuesday continues with influential UK data in the form of labour market stats. The UK’s Claimant Count Rate, Jobless Claims Change, Average Weekly Earnings, Unemployment Rate, and Employment Change will all be published and could offer some moderate to high movement on the British Pound to US Dollar (GBP/USD) and Euro (GBP/EUR) exchange rates. Thursday will see the latest UK Public Finances and Public Sector Net Borrowing stats out.
Euro (EUR/USD, EUR/GBP) Exchange Rate Forecast
The Euro could be in for some interesting movement on Tuesday when the German and Eurozone ZEW Surveys are released. The German ZEW Survey Expectations for February and Eurozone Economic Sentiment for February are expected to be the most influential, and both had remained in negative territory in January. Any move to climb out of contraction could give the Euro exchange rates (EUR/GBP, EUR/USD) some support, but a further decline in sentiment could bode badly for the common currency.
Meanwhile, Thursday will see the release of a slew of German and Eurozone Markit Purchasing Managers’ Indexes, including the Manufacturing, Services, and Composite PMIs. Friday closes the week with the final German Gross Domestic Product (GDP) growth numbers for the fourth quarter. Additionally out will be the final Eurozone Consumer Price Index (CPI) inflation stats, and the German IFO Business Climate, Expectations, and Current Assesment surveys.
US Dollar (USD/EUR, USD/GBP) Exchange Rate Forecast
Wednesday will be an exciting day for the US currency when the Federal Open Market Committee (FOMC) releases its latest meeting minutes. The minutes from the January 30th meeting will be closely observed for any hints about the Fed’s monetary policy path. An indication rates may need to be tightened could support the US Dollar exchange rates (USD/EUR, USD/GBP), but the bank has taken a pause and adopted a wait and see approach while economic data and geopolitical developments play out.
On Thursday, the US Durable Goods Orders stats will be released, and forecasts suggests December will see a 1.7% gain, after the previous month’s 0.7%. Markit’s US Manufacturing, Services, and Composite PMIs will also be out, as well as the US Leading Index, and Existing Home Sales stats.