A strong Euro and a weak Pound
23 December, 2015
As the markets have settled following last Wednesday’s interest rate announcement by the US FED, the rates haven’t seen much movement, and yesterday’s trading day saw a continuation of trend with the sterling weakening against both the Euro and Dollar. Against the Euro, the pound dropped over a cent and by early afternoon and against the Dollar a similar story occurs, with the pound falling slowing and steadily losing just under a cent throughout the day.
In terms of yesterday’s data releases, in the morning we saw UK Consumer Confidence post results above forecast at +2, up from +1 in November. This is the first time the index has remained positive for a complete calendar year. UK Public Sector Net Borrowing followed soon after and registered at £13. 557B above expectations of £11.000B for October. US GDP came out above expectations, however the Dollar barely reacted to this data, aiding the euro as it continues to go one better than the other key currencies.
Today’s trading day kicks off with UK GDP for the third quarter at 9:30am which is due to follow previous consensus and show no change. This is swiftly followed by UK Current Account data. However, today’s main release to keep an eye on is the US Durable Goods Orders at half 1 as well as Canadian GDP.
As Christmas approaches, there is a fear that the negative trend with continue over the Christmas festivities as there are no big data releases due to sway the drift. As such, most customers with an approaching euro requirement are opting to purchase on a forward contract to secure their Euros now avoiding further loss, whilst not tying up all their capital, requiring just 10 percent of their overall purchase to secure 100% of the euro funds. Speak to your Currency Index account manager today to see if this could be the best option for your upcoming need.
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