The Pound Under Pressure

17 January, 2013

Simon Eastman

The markets are also holding out for Friday, when David Cameron is due to give a speech over the UK’s stance towards the EU. Many MP’s are speaking up, trying to influence the speech and many believe this speech could end up “re-shaping Britain’s role in the world”. With such a key event coming up concerning Britain, investors are obviously concerned about holding sterling. Wednesday’s trade proved that, as with no data to help, the pound lost ground against a basket of major currencies. The Eurozone inflation data came out as expected and lower than the UK’s, which helped the single currency make some further gains. The pound fell half a percent against the euro over the course of the day, along with similar losses against the Scandinavian currencies (which are linked to the single currency) such as the Norwegian, Swedish and Danish Krona. The pounds losses weren’t just limited to the European currencies, as losses were seen against the commodity driven Australian, New Zealand and Canadian dollars. The losses were limited to around half a cent but against the under pressure US dollar, slightly wider losses were seen with the greenback gaining nearly a cent despite an array of worse than expected data releases stateside including the key Beige Book which, as a key indicator of sentiment toward the US economy as a whole, suggested growth would be “slow and moderate” in 2013. So with no UK data out again today, ahead of retail sales and of course David Cameron’s speech on Friday, the pound could well be in store for another loss making day. If you are looking to buy any major currency in the coming weeks, it may be prudent to act sooner rather than later. Currency Index are able to offer Forward Contracts as well as Limit and Stop Loss Orders on a wide range of major currencies to help you manage your currency risk, so it’s well worth contacting us today to discuss your up-coming requirement. With the pounds recent poor form, delaying could end up costing you that dream home abroad.