Can the pound fight back

19 March, 2014

Matthew Boyle

Yesterday saw further losses for the pound as further ground was given across the majority of the board but most significantly in the spotlight of the majors. Despite negative CPI data (Feb) from the Eurozone – down to 0.3% from a projected 0.4% – the market saw a temporary spike which they slowly subsided throughout the days trading, leaving the pound with around a half-cent loss against the single currency. In the afternoon the USD weighed in with Industrial data (Feb) which was up to 0.6% from a projected 0.1% which only added to the pounds woes with the USD gaining around ¾ of a cent throughout the day.

At present it seems the pound is under increased pressure and indeed the last couple of weeks have been a tough journey with the pound losing almost 3 cents against the single currency and just over 2 cents against the greenback. It must be remembered though that we have had almost no data of note from the UK so to a large extent it has been all the Euro and Dollar that has been making any noise. But with the raft of data we have this morning the main question should be – can the pound fight back?

This morning we have already seen the pound claw back almost all of the ground lost against both majors yesterday, as we look ahead towards a particularly busy day for the pound. We have a raft of unemployment and earnings data alongside the BoE vote of Q.E in  the morning. And whilst the BoE vote is unlikely to change, unemployment data could certainly shift the balance as we saw last month. However all eyes will be steadied on 12.30 as George Osbourne will deliver the UK 2014 budget – “ to support a resilient economy”. As individuals we can only hope that we will benefit, but perhaps the bigger question is can the pound mount a rally?

Any of you who have a foreign currency transfer to make in the near future would be well advised to speak Currency Index today for some friendly and professional guidance.

Without doubt with the data that is being released today we could well see a breakout of the rates within the market. Certainly against the Euro the pound is touching the floor of the range it has been performing within over the past weeks. Keep in close contact with your Currency Index broker to avoid being potentially caught out.