Pound gains following inflation and RPI

Yesterday was a marginally good day for the pound, with it gaining around half a cent against both the USD and the Euro. With the kick-off of morning data poor business sentiment data coupled with positive CPI Inflation data from the UK (1.7% from a predicted 1.6%) taking it to a four year low and started the shift in the pounds favour. This move continued as despite a small drop in the producer price index data- which in fairness is a release of minor note- retail price index data came in up on forecast at 2.7% from a predicted 2.6%.

Interestingly despite the relatively bad weather last month, which would normally effect these results, they showed a positive and overall it was a relatively good morning for the pound, although it should be noted its gains at present are marginal. As the American markets opened in the afternoon the pound was aided further with US data showing a reduction in the home price indices and also new home sales. This again helped the pound which over the day’s trading clawed back just over half a cent against the greenback which in the past week has seen renewed strength.

Today is a much more quiet day in terms of data for the pound, with the only data of note from the majors being USD durable goods orders and Bank stress test info – a heavy hitting report which can easily help shape US monetary policy and so too worldwide positions.

Elsewhere this morning we do have the RBA Governor Glenn Stevens speech which will be certainly interesting as we have seen the Australian Dollar gain almost 8 cents back against the pound in the past 6 weeks.

With the lack of data today and the apparent sentiment in the market at present that the pound is perhaps the worst of the three picks of the majors – will we see yesterday’s gains eroded or galvanised? In recent weeks we have certainly seen that a lack of UK data has been negative for the pound, and the US seems to be mounting somewhat of a comeback at present, both against the pound and Euro. So whilst the pound is bottom of the majors stack and rates for buying currencies with pounds are falling, those of you who are buying property overseas in the coming months may want to consider a forward contract to secure your rate and remove the risk of a further weakening pound.

 -Speak to your Currency Index broker today for some friendly and professional guidance on how to get the most out of your transfer and to help avoid being caught out by any adverse market movements. We can help you stay well informed and well ahead of the markets.