Positive vibes on an EU deal help the Pound

Yesterday saw a significant jump up in strength for the Pound as the European Council summit got underway and negotiations over the deal which may see the UK stay in the EU reached a head. A particular jump in strength was seen when Jean Claude Juncker, the EU Commission President, said he was “quite confident” that David Cameron will get the deal he wants. In a clear sign that the markets are confident of a UK-in vote if a deal can be reached the Pound clawed back a cent against the Dollar and almost two cents against the Euro.

In a note of caution though, it was evident as trading came to a close that all is not entirely clear, as the market settled and the Pound lost some of the ground it had gained earlier in the day. There was little other data of note to trouble the markets with the EU summit definitely taking centre stage.

Today sees a few major releases from around the globe, with UK retail sales and public sector net borrowing and US CPI inflation. However it is likely that the market is going to remain glued to the EU summit and a possible deal announcement ahead of the weekend. If a deal does come, then we could see a window of opportunity for those with Pounds in hand to secure their currency on a bit of a spike before the inevitable pre-June referendum uncertainty comes back to the fore. Remember you can secure your currency for up to a year ahead on a forward contract, only needing to pay 10% of the Sterling now to do so.

If you do have an upcoming currency requirement then make sure you stay in close contact with your Currency Index account manager to be kept informed of exactly what is happening during what will likely be a tumultuous day.