The Pound continued to fall against the Euro and Dollar following the release of the 2017 Budget on Wednesday, while analysts digested the information and forecasts provided. The deadline to which a Brexit bill must be agreed is drawing closer, and an agreement must be reached by 15th December. This period could prove to be an extremely volatile time for GBP exchange rates.
Political uncertainty in Germany was the main focus in Europe last week as there was a huge concern Merkel would be unable to form a coalition government. Markets feared Merkel would be forced to call a snap election which would risk the far right party gaining more seats in Parliament. Friday the SPD party confirmed they were willing to re-enter coalition talks with a strong chance of reaching an agreement and diminishing the odds of a second election in Germany. Euro strengthened 0.8% on the back of this reaching 1.19 against the US dollar and falling back to 1.116 against the Pound.
Cable hit a one-month high last week largely due to data coming out of the UK and the UK budget. The only significant data from the US was Markits US PMI projections for November were published during black Friday. Projections dipped across the board as Markit’s report noted that prospects for 2018 were mixed, which concerned US Dollar investors. Markets will be on the lookout this week as key November data is release from the US all week.
Week Ahead (GMT)
28th Nov – 7:00 – Bank Stress Test Results -UK GBP
28th Nov – 7:30 – BOE’s Governor speech – UK GBP
28th Nov – 20:45 – Treasury Sec Mnuchin speech – US USD
29th Nov – 13:30 GDP – US – USD
30th Nov – 9:00 German Unemployment – EU EUR
30th Nov – 10:00 CPI – EU EUR
Looks like a turbulent week ahead for all majors. The EUR has fought back against GBP and USD so this will be a great time to buy for those sitting on the fence. Get in touch today to find out how.