Forex Weekly Round Up 18 May 2015 – 22 May 2015
The UK economy could be in better shape than estimated at the start of 2015 after construction output increased by 3.9% month-on-month in March.
The sector had fallen in January and February, and private sector house building rose for the first time in six months in March, with constructions up 1.3%, figures from the Office for National Statistics reveal.
Friday brought news the UK retail sector smashed expectations as warm weather encouraged shoppers on to high streets across the UK last month. Retail sales volumes (excluding fuel) were up 4.7% year-on-year, gaining 1.2% from March, beating economist expectations of 3.7% and 0.4%.
On Monday Deutsche Bank reported yesterday that it would consider moving part of its British operations to Germany if the UK votes to leave the EU. The German company is the first of the big banks to begin a formal review into the implications of a referendum on EU membership.
Britain’s annual rate of consumer price inflation fell below zero for the first time in more than half a century, figures showed on Tuesday, though Bank of England Governor Mark Carney said the dip was likely to be brief.
Over the pond, Federal Reserve member Charles Evans stated that a rate hike for the US would not be appropriate until early 2016. Evans, who has long argued for a delay to rate hikes so as not to undermine economic recovery, said the US central bank should not move rates until there was greater confidence that its inflation goal could be hit within one or two years.
Analysis of the markets for 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, 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 comparison.