Is The Pound Starting To Falter

Yesterday there wasn’t much data out for the UK, only construction PMI, but despite it coming out better than expected at 60.9 compared to 59 forcast, sterling spent the day on the back foot against all the major currencies.

We are still trading at some of the best levels in 8 years against the ailing euro but even that managed to keep the pound at bay during trade. Initially gaining half a cent off the back of the PMI data it lost all gains over the course of the days trading and against other currencies its performance was even worse.

The Aussie dollar gained early 2 cents on Monday night whilst the Kiwi dollar gained a cent. The Aussie gain was due to no interest rate cut from the RBA which was a surprise and the Kiwi rode off the back of stronger sentiment towards the higher risk currencies (those with higher interest rate yields). More relevant was the release of Aussie GDP last night which came out as expected so created little dollar movement.

It was a day of little ecostats so sentiment led the way, and with so much pressure on the euro recently regards Greece, but a recent reprieve from the ECB giving a 4 week extension, it seems markets gave the euro a break. The single currency and those Scandinavian Krone that peg to it, all did fairly well over the day as a lack of data gave way to sentiment investing.

The Canadian dollar was one beneficiary fo good data which gained after GDP stats came out better than expected at 2.4 percent rather than the forecast 2 percent, clearly good news for Canada and their economy. We saw the Loonie gain a cent and a half off the back of the data.

So on to today and the markets will be looking out for UK and EU services PMI along with EU retail sales. The US also have PMI releases along with retail sales data in their Beige book release, while above the border Canada have the most key release of the day with an interest rate decision at 3pm, although they are expected to hold rates where they are at 0.75 percent. Anyone looking to send money to Canada should be wary that any change tot he rates will certainly lead to some volatility so make sure you keep in touch with your CI currency expert to stay ahead of the game.