Busy few days for UK data Inflation today

With an absence of any data released yesterday, the markets were trading with the technical trends with small 0.5% swings seen in most major currency pairs. The pound remains under pressure after last weeks’ Bank of England meeting which saw downgrades to UK growth and inflation forecasts. Since the French elections, the Euro is still in the driving seat and opened the week again making gains against both the US Dollar and the pound, with GBP/EUR trading near a 3 week low and testing key support levels that could open up another 2 cent drop if broken.

Cable exchange rates continue to be relatively stable with both currencies underperforming at present. Key resistance at 1.30 has stalled the pound’s recent rally against the dollar as traders now await the next string of important eco-stats in the coming days. Rates remain very close to a 7 month high for buying US Dollars.

This morning at 9:30 am we have the latest Inflation figures for the UK in April with analysts expecting a jump up to 2.6%year on year from 2.3% previously. Shortly after at 10 am the Euro-zone will announce its latest GDP growth figures with no change expected. This all kicks off a busy few days for Sterling with unemployment and average earnings due tomorrow morning and Retail Sales on Thursday. All these releases pose as much risk as they do opportunity, particular given the shift in sentiment towards the pound over the last few days. In addition to this, historically the pound always underperforms in the lead-up to a general election and we are now just 3 weeks away from this major event meaning we could be in for a bumpy ride ahead.

If you have a currency transaction to make in the coming months, contact your broker today from some friendly guidance on how best to maximise your exchange rate during this uncertain period.