It’s a bit like that old saying about buses… you know; they all come at once. Well, we have a perfect storm of economic, political and geopolitical pressures moving the markets, so hold on to your hats! While you’re holding on to your headgear, it’s a good idea to speak to your Currency Consultant, too, to help you with any big currency plans you have for this week and the volatile weeks ahead.
All eyes on G20
The G20 meetings will take centre stage for currency markets and many eyes will be watching developments with the US-China talks. The big news on the data front this week will be the UK and US Gross Domestic Product (GDP) reports. From the US, there will be the monthly Consumer Confidence gauge, May’s new home sales and Crude Oil Inventories
US data also in the spotlight
Markets await US GDP results with some trepidation, although they are expected to show a rate of growth along the lines of what we saw last quarter and therefore a positive result in light of the slowing global economy. US consumer confidence was riding high last month, but this month’s figures may well suffer from concerns about the US waging wars of words and trade tariffs on China and Iran.
New Zealand not so self-assured
New Zealand awaits their latest business confidence benchmark in the ANZ Business Confidence report, but this is expected to show a fall, thanks to recent monetary policy and economic activity. The recent caution emanating from the Reserve Bank of New Zealand shows a tentative approach from the central bank and reiterated concerns about the effects of a global economic slowdown on New Zealand and its fellow commodity and trade-reliant countries – as well as their currencies.
Pound pushes past political party peeves
The UK GDP data forecasts predict a slight slowdown in growth compared to the previous quarter, as Brexit uncertainty continues to bite the real economy. With political shenanigans aplenty, markets are becoming numb to the Conservative Party chaos; instead focusing on the data and all that is happening with Sterling’s currency counterparts in order to set the tone. There’s enough going on to affect the Pound’s greatest currency rivals right now – and in turn, the Pound itself –without Sterling slipping on continued political party uncertainties.
Central banks have their say
It continues to be a busy week for the central banks, as the Bank of Japan makes their latest announcement on the morning of Friday 28thJune; and the Bank of Canada follows with their Business Outlook survey results in the afternoon.
What to watch out for next week
Next week brings a new month and a raft of Purchasing Managers’ Indices from across the globe, each offering useful insights into the future direction of markets. We will hear about the performance of the manufacturing, construction and service sectors in the UK, Eurozone, US and multiple other jurisdictions. There will also be significant trade balance data and confidence surveys across consumer and business.
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.