This week could prove a key week for the Pound with the release of Services PMI. A positive number could help move GBP against the majority of currencies and potentially help renew confidence in Sterling. The Services PMI will follow last weeks unexpected construction and manufacturing PMI, both numbers delighted markets and the GBP/USD rose from 1.314 to 1.3294. Likewise, GBP/€ experienced significant uplift moving from 1.1801 and reaching a week high of 1.1926.
Slightly earlier than the UK’s data we have The Bank of Japans Governor Kuroda speaking. During his last conference at Jackson Hole he underlined Japans ability to introduce further stimulus in order to combat disappointing growth. Although any announcement tomorrow will be unlikely it will be very interesting to observe his comments on potential asset purchasing, Monetary guidance and the potential of negative interest rates.
Whilst not a specific data release China hosts the annual G20 summit this year. No doubt the Brexit and the UK’s exit strategy will be a hot topic of discussion. Especially as Japan has already highlighted the fact that the UK needs a viable plan to retain Japans bank business and car production in the UK. The comments arose following concerns of supplementary trade tariffs.
Tuesday is a very big day for the Southern hemisphere with key data releases from Australia.
In August Australia’s interest rate was cut to an all-time low of 1.5% however it is widely anticipated there could be further cuts before the end of the year. Although widely anticipated to remain at 1.50% it will be extremely interesting to see comments come from the RBA statement which follows. Any leaning to quantitative easing or discussion of the slow economy could see the AUD move.
On Tuesday afternoon the US posts its ISM non-Manufacturing figures for August. They are expected to reach 55.4. A positive number would without doubt buoy the US dollar. However, it is worth noting that last month’s figures did fall short of the anticipated 56.0 reaching 55.5.
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