The coming days should be interesting in terms of currency market volatility as traders digest the Federal Reserve’s stance on monetary policy, the European Central Bank will allot a series of targeted longer-term refinancing operations and with the Scottish referendum approaching ever closer.
The Pound Sterling to Euro exchange rate was trending in the region of 1.2594 towards the end of the European session.
The Pound Sterling to Canadian Dollar exchange rate was trending in the region of 1.7857 towards the end of the European session.
Thursday morning will be an interesting time to gauge the early impact on the wider currency market of the Fed’s latest decision regarding their monetary policy.
There will be several British data releases on Thursday morning. Perhaps the most influential of these data publications, in terms of potential volatility, is yearly retail sales which is expected to rise from 3.4% to 4.8%.
With only one Canadian economic data publication on Thursday the ‘Loonie’ (CAD) is most likely to be affected by foreign currency movement or changes in commodity prices. Canadian International Securities Transactions hit a deficit figure previously of -1.07 billion.
Those invested in the Euro will be keeping a close eye on the ECB on Thursday as they allot a series of targeted longer-term refinancing operations. The ECB describes this; ‘Counterparties will be entitled to an initial TLTRO borrowing allowance (initial allowance) equal to 7% of the total amount of their loans to the euro area non-financial private sector, excluding loans to households for house purchase, outstanding on 30 April 2014. In two successive TLTROs to be conducted in September and December 2014, counterparties will be able to borrow an amount that cumulatively does not exceed this initial allowance.’
Thursday evening will see the conclusion to the Scottish referendum with the results likely to be available early on Friday morning. A ‘no’ vote is likely to boost the British currency exponentially compared to the previous few weeks, and with nothing in terms of British economic data on Friday there should be few obstacle to curtail the uptrend. Similarly, however, should the vote be ‘yes’ the Pound will decline dramatically.
Friday’s European data will be of little consequence to wider market movement but may be an interesting guide to the currency bloc’s economic standing. German Producer Prices are expected to fall in line with the current figure of -0.8%. The Eurozone current account (non-seasonally adjusted) hit 20.8 billion previously.
Canadian economic data on Friday is varied in terms of importance. The Consumer Price Index is acknowledged as the most influential of these publications and is forecast to stay in line with the current figure of 2.1%. Those invested in the ‘Loonie’ will also be interested in the yearly Core Consumer Price Index and the monthly wholesale sales data.
