Many will be watching the news at the moment about the uprising across northern Africa and other states but many will be unaware about the effect on the currency markets. At the moment it has been a positive thing for the euro that has gained against a majority of currencies. This was due to its lower exposure to the commodities that are being effected. Oil has been the largest hit as speculation continues about supply problems which has weakened the largest user, the USD.
Other large events will be Wednesday Bank of England minutes that are due for release at noon GMT. The question here is whether the 9 members of the MPC that vote on interest rate changes would have changed from previous months. If more have voted for a rise, which is the speculation at the moment I would expect sterling gains. On the other hand as this has already started to be priced in, if this is not seen we could see considerable sterling weakness.
Also this week we have US housing figures, this is one of the key factors that started the most recent global financial crises and one that has seen very little growth in the last 2 years. Again these figures could be seen either way, for example if positive it could weaken the dollar as it shows the US foundations are improving. On the other hand it also shows that the global markets are improving so the dollar could weaken as risk appetite changes.
The euro also has its own news out this week industry order, and industry confidence. These are released on Tuesday and Wednesday and are expected to strengthen the euro.
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