Weekly Market Report 05/03/18

GBP

Sterling endured a tough week as it weakened around 2 cents against the Euro and US Dollar. Main reason for this is the UK decision to reject the EU withdrawal Treaty draft which stated there would be a hard border between Northern Ireland and Republic of Ireland. GBP/EUR hit highs of 1.1398 and lows of 1.1180 whilst GBP/USD hit highs of 1.4048 and lows of 1.3715. Looking forward to the week ahead the main mover for Sterling will be the ongoing Brexit negotiations as the UK and the EU will agree on the transition period for Brexit by the end of March.

EUR

Relatively quiet week for the Euro as the main movers came over the weekend with news coming out of Germany that Angela Merkel has finally agreed a coalition deal. The result of the Italian election on Sunday came in as a hung parliament with the 5-star movement gaining the most votes. Euro was hardly affected by this news as a hung parliament has been predicted for some time now. For the week ahead, the main mover for the Euro will be the ECB interest rate decision and Draghi’s speech on Thursday. With the European economy continuing to strengthen markets will be hoping for Draghi to announce when the ECB plans to slowdown and eventually stop its Quantitative easing programme.

USD

The Dollar had a good start to the week gaining against all major pairs after the odds increased for FED to hike interest rates in March. The continued strength in the US economy and the US hitting its inflation target meant we could potentially see more rate hikes than expected this year. USD/EUR reached its lowest point in 2 months hitting 1.2167, USD/GBP also hit 2-month lows at 1.3715. Main mover for the Dollar this week will be Non-farms and Unemployment rate data in the US on Friday. Non-farms is expected to come in 10k lower than last month at 190k any movement either side could see volatility in the US Dollar.  

 

Data for the week ahead:

Wed – EUR – Gross Domestic Product (YoY) (Q4)

Wed – EUR – Gross Domestic Product (QoQ) (Q4)

Thu – EUR – ECB Interest Rate Decision

Fri – USD – Nonfarm Payrolls (Feb)

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