Forex Weekly Round Up 4 May 2015 – 8 May 2015
Bank holiday Monday saw the release of the Markit Manufacturing data for Europe. Manufacturing growth across the currency zone as a whole eased off in April from March’s 10-month high. With the reading coming in at 52, which is just down on the revised figure of 52.2 for the previous month.
Manufacturers also raised average selling prices for the first time since August 2014, news that will reassure policymakers at the European Central Bank after launching a large-scale quantitative easing programme in an attempt to head off deflation.
The US trade deficit widened in March to the highest level in more than six years, fuelled by a record surge in imports as commercial activity resumed at West Coast ports following a resolution to labour disputes. The gap increased 43.1%, the biggest jump in 18 years, to $51.4 billion, the largest since October 2008.
The chair of the US Federal Reserve, Janet Yellen, has warned stock market levels present ‘potential dangers’ when speaking at an IMF conference on Wednesday and said that this is something that the US central bank will be watching closely.
The Pound rallied against a host of its major counterparts on Friday morning as the initial UK election results suggest David Cameron will remain as Prime Minister.
The FTSE 100 opened higher in London, as investors welcomed the end of election uncertainty. Analysts said sterling jumped because the projected result meant the government’s agenda was likely to stay consistent.
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, 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.