Forex Weekly Round Up 8 June 2015 – 12 June 2015
On Monday, the US Dollar experienced a quiet day. Due to lack of data coming out of the US, the markets were sentiment driven and whilst slightly choppy throughout the session, GBP/USD closed at roughly the same levels as the opening price. The US sold $48bn dollars worth of 3 and 6-month bonds, pushing the yields to 0.015% and 0.080% respectively.
The UK’s biggest business body (CBI) said that it believes the economy will grow healthily for the remainder of the year, after stalling in the first three months. To the surprise of most economists, the UK economy grew by just 0.3% from January to March, its slowest rate since 2012.
The Pound strengthened after data on Tuesday showed Britain’s trade deficit with the rest of the world narrowed more than expected in April, suggesting that it might act as less of a brake on growth during the current quarter. The Office for National Statistics said Britain’s total trade deficit narrowed to 1.202 billion pounds in April from an upwardly revised 3.093 billion pounds in March, it’s lowest since March 2014.
The major talking point on Thursday was Greece, where major differences with their international creditors raised the pressure on the Athens government, as IMF negotiators walked out of debt talks in Brussels and flew home.
The surprise IMF announcement came as the European Union told leftist Greek Prime Minister Alexis Tsipras bluntly to stop gambling with his cash-strapped country’s future and take crucial decisions needed to avert a devastating default.
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.