Sterling spikes for great buying opportunity

Last week the pound was able to recover itself from its year-to-date lows against the Euro, and has improved further in the last couple of days providing an opportunity to buy at the best exchange rates for over 3 weeks. GBP/EUR is now testing secondary levels of resistance and arguably peak rates that could be seen in the next couple of months. The recent gains of 3.5 cents are still relatively small but also the biggest we have seen in the downward move from 1.40. Anyone needing Euros by the summer may wish to strongly consider a FWD contract where you can fix your rate with just 10% deposit. GBP/USD has also peaked at a 3 week high which also means excellent buying opportunities for pegged currencies such as UAE Dirham.

Data was very thin yesterday with just ZEW survey for the Euro-zone during the morning session. This figure came in much better than expected at 21.5 compared to a forecast of just 13.9, showing that economic sentiment and confidence is very much improving in the Euro-zone, and lent to a stronger Euro in yesterday’s session, continuing gains against the US Dollar and restricting further movement in GBP/EUR.

Today is the start of the key announcements for this week, and with it comes added risk and volatility considering the pounds current higher market position. At 9:30am we have the latest unemployment figures and average earnings for the UK, with little change expected from last months’ results. This comes ahead of Thursday’s announcements for UK Retail Sales and the ever volatile ECB policy statement and conference in the afternoon. To avoid the risk of these releases, contact your broker today to take advantage of the recent spike that is unlikely to last much longer.