A Mixed Few Days For Sterling
16 January, 2014
Yesterday, without any data releases saw sterling have a mixed day across a basket of currencies as the markets used other area zone figures to trade from. The day before saw inflation come down to the benchmark 2% figure for the first time in years which actually weakened sterling off initially although it did recover until the US markets opened in the afternoon.
Yesterday’s trade was fairly flat on the whole, with early gains (recovering losses from the day before) again up until the US markets opened when the gains reversed back again. From a general point of view, it’s not really surprising. With no data to go on, the rates are moving around the key resistance points against the major currencies, dropping a bit below, making gains above and settling back to the key points. In all likelihood without major positivity from the UK we are not going to see much change to this pattern, meaning if you have a currency requirement coming up then its best to try and take advantage of any spike above these levels rather than thinking, it’s gone above, “let’s see if it gains another cent”, which isn’t likely.
So back to today and we had some extremely weak Australian employment figures overnight. The figure for change in the amount of new jobs for last month was expected to be +7500 but in fact came out a whopping -22,600! This, as one might expect saw the broadly weak Aussie plummet nearly 3 cents against sterling, so a great opportunity to take advantage for any of those needing to send money down under.
Another quiet day for UK data today so again sterling could have a choppy day dependant on other area zone releases. We’ve already had some German inflation figures which came out as forecast, so unsurprisingly the euro is trading flat against sterling and the US dollar, for now anyway.
Still to come is the ECB monthly report, where we could see them further dampen the hopes of the single currency with talk of forward guidance and possible hints at lower interest rates. Of course, opinion can change quickly so what they said last week, may be the opposite today.
EU inflation figures come this morning also followed after lunch with US inflation, jobless claims and various Fed member speeches ahead of the Bernanke the Fed president’s speech later tonight. So all US dollar buyers, make sure to keep in close contact with your broker here at Currency Index to keep abreast of the inevitable movements.
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