A Day Of Highs And Lows For Sterling
18 December, 2012
Monday was a day of little major movement for the pound, but with a lack of any data, this wasn’t surprising. Since Friday, the pound was a little lower against the euro, as markets still favoured the single currency off the back of news the European Central Bank will take control of 200 major European banks.
As the Euro continued to strengthen, although gains were limited as the week started, the opposite could be said of the US dollar. The “currency see-saw” we have seen apparent of late, was again in full effect, with the dollar dropping to its lowest against the pound in nearly 3 months. For those looking to send money to the States or businesses purchasing from the Far East, times are looking good. However, don’t miss out on the opportunity to trade at these attractive levels if you have a requirement before year end. We could see further sterling gains if US politicians don’t come to agreement on tax increases and spending cuts but holding out would be a gamble which could easily backfire.
Against the single currency, sterling dropped to a two month low in Asian trading, although it managed to claw some losses back during Mondays’ trade. The markets are looking to inflation data today and tomorrow’s Bank of England minutes for further insight, so the next couple of days will be key for anyone moving funds into the EU. If inflation data is weak, investors will see an opportunity for further QE, which could be compounded by any hint at a split in voting when the minutes are released on Wednesday.
If you have a euro transfer to make coming up, it might be prudent to look at fixing it sooner rather than later to avoid any disappointment if things go the wrong way. And with Christmas only a week away, you might appreciate one less thing to worry about!
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