10th May - Weekly FX Update

Updated: 3 days ago

GBP/EUR

Monday 9AM 10th May: 1.15753

GBPEUR started off last week strong, however after the Bank of England decided on keeping interest rates at the extremely low level of .1%, as well as cut its bond buying programme to $3.4bn per week, the Pound lost ground on Thursday. The bank did assure that this was not a change in monetary policy and was simply in line with its previous targets. Post-Brexit tensions over the past 5 days have also increased as French fisherman threatened to block British trade into Europe. This is the second type of potential trade blockade since the turn of the year, and it leaves the GBPEUR a little more volatile as it wavers on the outcome. Looking ahead to this week, the Pound made a very early rally this morning and recovered its losses from last week to open up trading. As a result it will look to move towards the 1.16 mark and test the barrier, after failing to do so on multiple occasions recently. ECB monetary policy and UK GDP data will dominate economic news, however it is expected that neither will have a significant impact on exchange rates.


GBP/USD

Monday 9AM 10th May: 1.40882

Last Friday, after a few days of trading sideways, the Pound gained considerable ground over the Dollar. Heading into the weekend trading below 1.39, the GBPUSD reached its highest level of 1.405 this morning since February. Weaker than expected data from the US as well as an accelerated reopening of the UK economy has propelled the Pound forward. US employment data showed job growth falling very short of predicted targets, causing some uncertainty as to whether the US economy had fully recovered. Looking ahead to this week, UK GDP data is set to be released on Wednesday, however it is expected to be in line with current predictions so its effect will be fairly limited. The Pound will have to work hard to build some consolidation above 1.40, in wake of a slew of US data headlining this week, including CPI (Consumer Price Index).

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