What goes up, often comes back down

With little data of note yesterday, the Pound fell back a little after its recent surge, as markets took into consideration the recent election results after the long weekend. Often the case after several positive days in a row, an adjustment follows, in this case seeing around 0.5c shaved off the rates for GBP-USD and GBP-EUR. The Pound was also down against the Australian, New Zealand and Canadian dollars, in a clear change of direction.

Markets are now likely to be nervous in the run up to next year’s general election, and as the IMF also warned yesterday that banking reform is too slow, and Bank of England governor Mark Carney called for better ethics in banking during his evening speech, perhaps the dark days of the financial crisis are not all that far behind us after all.

Falling UK mortgage approvals also weighed on the Pound during trading yesterday.

Today is again not busy in terms of data releases, although German unemployment (8.55am) and Eurozone consumer confidence (10am) could influence the Euro.

In general it seems the British weather and our currency are up to their usual tricks. It’s not too late to take advantage of good rates though, as the Pound is only just off recent 18-month highs against the Euro, and near 5 year highs against the US Dollar – both can still be bought at excellent rates even for a transfer up to 2 years in the future. Let’s hope the sun comes out again later this week too.