Pound rallies against Euro

The Pound has spent much of the last couple of weeks on a bit of a low, following positive comments from ECB president Mario Draghi at the ECB’s monthly policy meeting and press conference. Mr Draghi spoke very positively about the Eurozone’s outlook and explained that further stimulus was not going to be necessary.

The Euro took significant strength from this, and with a broadly weak Dollar also playing it’s part the Euro was suddenly flavour of the month and the destination for many investors. The Pound lost close to 3 cents against the Euro and even lost ground against the Dollar to the tune of 2 cents.

However Sterling is much more resilient these days due to the UK economy’s situation, and it managed to hold its own despite this significant knock, levelling out and then holding position for most of the intervening period.

This resilience was then justified yesterday with the release of UK retail sales figures. Retail sales in February grew three times faster than analyst’s expectations, and provided Sterling with the necessary boost to jump back up to the levels of recent highs.

Today sees a couple of key data releases – UK GDP and German CPI inflation. GDP is always a major piece of news as an economy’s growth is ultimately the key factor behind its status on the markets. This is the third and final revision of last year’s last quarter’s figure, so no massive surprises are expected, but don’t be surprised if we see significant movement if any curve balls are thrown. CPI in its self is not wildly concerning to a currency, but its impact on possible interest rate changes is very important. Mr Draghi said inflation was fine and only going to improve – is he going to be proven correct?

With recent highs once again back in play, and some key data due, now is likely a good time to be considering your options if you have an upcoming currency purchase. Speak to your CI account manager for an explanation of what we can do to help get you the best rate possible for sending your funds overseas.