The Pound followed recent trends last week with a particularly volatile few days – finishing down against the Canadian, Australian and New Zealand Dollars, but up against the US Dollar and Euro.
Caution is still the theme, with any unfavourable economic news continuing to damage sterling’s progress – a worry if you are looking to buy overseas property.
News of note last week included the CBI retail sales figures, which reported a shock increase for retailers in April – and conversely mortgage data which showed a decrease in new mortgage lending during March, dealing a blow to the idea that the housing market has reached the bottom. Thursday’s Nationwide survey showing house prices continuing to drop did little to help.
European markets were open yesterday during the UK bank holiday, and German retail sales data for March showed a decline, resulting in the Euro being sold off. The best Euro exchange rates for 2 weeks were the result. If you are sending money to the USA you will also be surprised this morning to see the US Dollar rate back up to nearly 1.50, despite stronger than expected US home sales figures on Monday. Investors have moved from the US currency to other riskier assets, resulting in a reduction in Dollar demand.
For the rest of this week, European retail sales on Wednesday morning will be of interest, as will today’s UK factory prices. The UK and European central banks then publish their monthly interest rate decisions on Thursday.
If you are moving further afield and sending money to Australia in the coming weeks or months, Australian interest rates are revised overnight on Tuesday. A cut in base rates could help improve the Aussie exchange rate and give you an opportunity to fix an exchange rate for later in the year. Aussie retail sales are then out in the early hours on Thursday, and employment figures very early on Friday – so this week could reveal the likely direction of the Australian Dollar for the next few weeks.
