Pound rally continues

20 May, 2016

Grace Rae

Yesterday we saw a continuation in the pounds recent rally following Wednesdays IPSOS MORI poll on the EU referendum voting. The stay vote was leading at 55 percent, while the Leave vote was down at 37 percent, making the biggest difference in votes so far and strengthening the pound. Aprils UK retail sales and ex-Fuel data came in well above expectations for both month on month and year on year. Retail Sales (YoY April) came in 1.8% better than predicted and Retail Sales ex-Fuel (YoY April) 2.3% better than expected. These results have caused a surge in rates and Pound-Euro has gained 3 cents in 48 hours making another great opportunity for Euros buyers.

US Initial Jobless Claims data was released in the early afternoon posting 3000 over expectation, meaning there are slightly more people claiming unemployment than expected and making this an area for concern for the US and whilst inflation is good, the market sentiment is focused on prospect of a rate hike next month.

Today is a quiet one in terms of data releases, with the only major data coming from Canada in the form of retail sales and Consumer Price Index at 1:30 this afternoon.

Could the past few days and a turn around in rates be the first signs of a new trend? With how volatile the markets can be and the continued uncertainty surrounding the EU referendum, there is just no way of knowing for sure, and as it is very early days this could still be reversed. Already this morning we have seen GBP-EUR rates correct following yesterdays boost.

As there have been lots of movement across the board, it just might be worthwhile considering placing in a limit order if you have an upcoming requirement. Call in and speak to one of our brokers today if you have any questions and we are more than happy to help.