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The euro was boosted by Christine Lagarde's comments yesterday.
The euro recorded another positive day in Monday’s trading as comments from European Central Bank (ECB) president Christine Lagarde lifted the single currency higher.
The euro gained marginally over the pound while EUR/USD advanced by around 0.15%. These are modest numbers, it must be said, but they reflect a far better mood than where the single currency was to begin the year.
President Lagarde gave the euro a leg up with some cautious comments. The euro saw a small bounce as markets took her warning that they should not bet on the ECB cutting rates just yet.
“Our restrictive monetary policy stance, the ensuing strong decline in headline inflation and firmly anchored longer-term inflation expectations act as a safeguard against a sustained wage-price”, she told European Parliament on Monday. Growth may well return later this year, Lagarde continued, and with wage pressures still firm, policy had to stay where it was until they could be confident inflation was heading towards 2%.
It wasn’t just in Europe that a sense of caution prevailed. Global stock markets peeked out from behind the weekend curtain, and finding things much the same this time out, opted to shy away from risk. Most of the world’s flagship indexes were little changed to slightly down as a result, although the S&P 500 is currently riding a streak of weekly gains.
Markets aren’t exactly famed for their restraint, however, and this is especially true in the land of currency. Tuesday sees the Gfk German consumer survey and US durable goods figures — two releases with the heft to move markets in a different direction. Projecting where currencies will move is a mug’s game, to put it bluntly, and any event (be it political, economic, or simply random) could see the cost of your next transaction rise.
In other news, Sweden moved one step closer to joining NATO yesterday after their application was approved by Hungarian parliament. Hungary’s veto had previously been the last major hurdle in the application, which could now be formalised before the week is out.
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your account manager on 020 3918 7255 to get started.
GBP: Politics dominates quiet week
The UK data schedule is pretty sparse this week, but there’s no shortage of political intrigue. Various disputes still loom over Westminster, while Lee Anderson strongly defended his recent remarks yesterday. Politics can have a massive impact on currency markets, so it’s worth keeping an eye on this as the week goes on.
GBP/USD: the past year
EUR: German confidence slow to build
The Gfk German consumer confidence survey nudged up to -29 from a 11-month low of -29.6 last month. This was in line with forecasts and shows the German economy is having a hard time blowing away the cobwebs of the last few years.
GBP/EUR: the past year
USD: Texas manufacturing up
The Dallas branch of the Federal Reserve reported an uptick of manufacturing activity in February after falling to an eight-month low in January. That comes before today’s durable goods orders, which should give us a better insight into US manufacturing at large.
USD/EUR: the past year
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