Where you will be able to keep up to date with all the latest changes in the currency market
The Pound weakened massively against both the Euro and USD last week as we head towards the back end of august. This is due to the inflation figures that came out last week at 10.1%, the highest they have been for over 40 years. With just 2 weeks to go until we find out who will become Boris Johnson’s successor, Liz Truss leads by 32 votes. Anytime there is uncertainty within the government it can typically tend to weaken the currency. Once Boris’ replacement is found then we could potentially expect to see some sterling strength as there won’t be as much uncertainty within the government.
The Euro ended the week on 4-week low after GDP figures came out lower than expected meaning Europe`s economy weakened, also following this data the pound has entered a phase of capitulation against the dollar last week causing the Euro to also follow its movements and enter into a weak phase. However, this week we have GDP figures coming out in Germany, expected to rise by 0.1% to potentially strengthen the Euro-zone economy and allow the currency to end the week on a high. Further to this news, inflation is still at an all-time high showing no signs of decrease as energy prices in Europe are still continuing to relentlessly climb higher and potentially weaken the economy. With not much market news coming out this week in Europe. The real focus will be on the GDP data and the news coming out for the dollar.
The dollar dropped to lows we haven’t seen since mid-July. This could be to do with the ongoing conflict within Ukraine. Russia have overtaken nuclear plant and they have been accused of using it as a military base raising fears of a catastrophe. With no real end of the war in sight we could potentially expect to see further Dollar strength. Hefty rewards are being given to volunteers if they sign up to the army as the Russians have had some significant losses. So, if the war was likely to end then we could expect to see the dollar weaken as investors may start looking into different currencies. This week we have GDP figures out on Thursday and depending on how the figures come out we could expect to see big swings either way.