Pound bounces back following positive Ecostats

8 October, 2015

Matthew Boyle

Yesterday saw a nervy start to trading following the IMFs global growth downgrade on Tuesday. Many were concerned over the UKs heavy reliance on imported goods and as such the pound did stumble a little and looked like it would lose ground. This was not the case however as it was aided in the morning by positive releases in both industrial and manufacturing production, all of which showed significant growth. This spurred the pound on and throughout the day’s trading it gained around a cent against both the single currency and the greenback. With no data of note from the Eurozone it was this data that led the days sentiment and trading for GBP against the EUR which had nothing to fight back with. 

In the afternoon it was the US that dominated releases and as such further movements. The main release from the US was the NIESR GDP estimate, which coming in as expected did little to move the market, and further data in the early evening did not change this.

Consequently the pounds gains held , and against the Euro it was a fairly up and down day with USD/EUR trading within around a 50 pips range and closing close to the days open.

Today will likely be a much more turbulent day as we see a number of heavy- hitting releases. In the morning we have German imports, exports and trade balance data, followed mid-morning by both the ECB and BoE minutes, MPC vote and BoE interest rate decision. In the afternoon focus shifts to the U.S as we see the FOMC minutes released. These releases have the ability to move rates significantly, and on a day where we have the big 3 going head-to- head we will no doubt see some serious movement. Will the pounds gains continue or we will see yesterday’s gains snap back? Whilst Mario Draghi and the ECB continue to promote the current Euro strength amidst fears that the Greek problem will rear its ugly head again, the U.S and UK are in a closely run race as to who will raise interest rates first.

With so much going on any mention or indications to this given will likely see rates move quickly so should you have anything on the horizon stay in close contact with your C.I account manager for some friendly and professional guidance to help ensure you don’t get caught out by any costly swings.