Forex Weekly Round Up 30 March 2015 – 2 April 2015

The ONS said Britain recorded zero inflation in February for the first time since the 1960s. Inflation is widely expected to turn negative in the coming months amid the lower cost of energy and falling food and oil prices.

The UK economy grew more than was initially forecast in the fourth quarter as consumers and exporters guided Britain into its longest stretch of uninterrupted growth since 2008.

The UK Markit Manufacturing PMI increased to 54.4 in March slightly above forecasts at 54.3, which hit an eight-month high, signaling the economy is on course for healthy expansion in Q1 2015.

The U.S. economy expanded at 2.2% annualized pace in the fourth quarter, led by the biggest gain in consumer spending in eight years. The revised increase in GDP, matched the Commerce Department’s previous estimate.

Greece’s biggest creditor, Germany, said that the euro zone would give Athens no further financial assistance until it has a more detailed plan of reforms and some are enacted into law. Chancellor Angela Merkel said Athens had some degree of flexibility on what reforms to implement but that they must satisfy their European partners.

Our analysis of the markets in the next three months is further weakness in the euro and strengthening of the dollar. Weakness in the Euro is good for those who are buying euros and dollar strength is better for those who are selling dollars. The currency markets are liquid and volatile, however, so we may see movements outside this pattern.

Those looking to buy Dollars and sell Euros should consider a Forward Contract to hedge against adverse movements in the long term. Please contact us for your free, no obligation FX analysis.