World markets are braced for an exciting week ahead, as UK Prime Minister, Theresa May, fires the Article 50 starting gun and the UK's trade negotiations across the globe begin in an official capacity. With the level of "certainty" that the triggering of Article 50 brings, Sterling is doing well, but the week ahead is likely to see currency market volatility as events unfold.
There will also be a veritable flurry of UK economic data, which, when teamed with the Article 50 launch, could cause some ups and downs for Sterling against its major currency partners. Key data due to be released includes house price index stats, UK mortgage data, Quarter Four Gross Domestic Product (GDP) figures, and the UK government's figures regarding the current account deficit.
The US Dollar has weakened as President Donald Trump has failed to launch his second major policy change after being thwarted by his own party. What he termed as the demolition of Obamacare has become an embarrassment for the President and his supporters. Final Q4 GDP growth figures are expected for the US this week, too, which are anticipated to be much the same as the previous assessments, although you never know in these unprecedented times. The US Dollar is at levels against the Euro not seen since a brief spike at the end of 2016, hovering around the $1.08 mark.
The Euro, meanwhile, has crept up a little recently, but its fortunes are tied closely to the US Dollar and its recent weakness. Europe is also expecting some important news on the economic front â€“ European Central Bank (ECB) and European Union (EU) speakers are scheduled this week; and there will be the final March inflation data, alongside business and consumer confidence indices. These are always a good benchmark of the economic state of play. The ECB is still confident that the European economic expansion will continue but events in Europe are playing out against a backdrop of contentious presidential elections in France and Germany, which have the capacity to deal a considerable blow to the Euro.
Surprises in store for New Zealand
On the other side of the globe, New Zealand released their latest trade balance figures. The markets had forecast a small surplus but the data actually showed a deficit of 18 million New Zealand Dollars. The Reserve Bank of New Zealand (RBNZ) kept interest rates at 1.75% as, was widely anticipated but the NZ Dollar is under pressure in spite of improving commodity markets which benefit NZ exporters.