Weekly FX Currency Market Data Forecast - Current Rate Predictions for GBP/EUR/USD

February 8, 2016 - Written by Minesh Chaudhari

STORY LINK Weekly FX Currency Market Data Forecast - Current Rate Predictions for GBP/EUR/USD

Last Week's Packed Economic Calender Triggered USD, EUR, GBP Exchange Rate Movement

Following last week’s packed schedule of statistics, currency market participants will have to wait until the final trading day for the main data releases of this week’s session, although the global stock rout will give investors plenty to ponder..

Exchange Rate Forecast - Pound Sterling (GBP) Could Fluctuate after UK GDP Data Release

Perhaps the main risk event of the week comes on Friday morning in the form of the latest whole of eurozone Gross Domestic Product figures. Expectations for this key release are not particularly elevated thanks to the European Central Bank’s recent action in downgrading its 2016 growth forecast for the euroland. The Q3 2015 version of the same data printed at a year-on-year 1.6% and most analysts feel that Friday’s Q4 numbers may well show at a lower annualised level.

Euro (EUR) Spot Rate Predictions - ECB Moves in 2016 Could Weigh on Euro Trading

The euro (currency : EUR) has enjoyed a strong performance against the other sixteen most actively traded global currencies during recent weeks, but a below par showing from Friday’s growth number could ramp up expectations regarding an increase to the European Central Bank’s Quantitative Easing programme next month, marking a potential point of inflection for the shared currency.

US Advance Retail Sales Numbers Forecast to Spark US Dollar Conversion Rate Shifts this Week

Meanwhile, Friday also brings the release of two key data sets from the United States. Investors remain unsure of the likely next move from the US Federal Reserve following last Friday’s mixed domestic labour market data and are looking towards public appearances by Fed Chair Janet Yellen later in the week for guidance. Market participants holding Dollar-denominated assets may gain more clarity on the likely trajectory for US interest rates and the US Dollar alike when January’s Advance Retail Sales figures are published at 1330hrs GMT Friday. December’s version of the shop sales number flopped, showing at -0.1%, but an improvement to 0.1% is anticipated for this week’s data. Such a result, combined with the expected improvement in the Michigan Confidence survey, (out at 1500hrs GMT on Friday), would cause analysts to up their bets on another one, or possibly even two, interest rate hikes from the Fed before Christmas. Such an outcome would trigger a sharp deterioration in the Pound Sterling US Dollar exchange Rate forecast.

EUR Strong on Further Stock Market Rout

Even while on holiday, China continues to deliver bad news with figures revealing that the People's Bank of China (PBoC) spent nearly US$100 billion of its foreign reserves on shoring up the yuan during January. This has triggered another stock sell-off, strengthening the Euro as traders turned to safer assets; an unwanted development for the European Central Bank (ECB) as a stronger currency could curb inflation.

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TAGS: Currency Predictions Pound Dollar Forecasts Pound Euro Forecasts