Currency news August 21st

21 August, 2012

Graham Harborne

Yesterday’s markets saw the pound remain fairly steady against the dollar but saw it gain over a weakened Euro. With little in the way of data releases comments released in reference to ECB bond buying sparked jitters in the markets which saw the euro lose nearly 0.5% against a basket of currencies. For some weeks now we have seen the markets reacting either positively or negatively to any speculation regarding the ECB bond buying programme. Yesterday’s comments aired on the side of caution with Germany’s central bank saying that any bond purchasing by the ECB posed ‘considerable risks to stability’.

The week ahead is fairly quiet in terms of UK data releases so we would expect any eurozone headlines, be they good or bad, to determine which way the market moves. On Friday however we have revised GDP figures and the rumour mill is already speculating a positive outcome with the figure potentially being an improved one. With the surprise rise in retail sales figures last week we could well see an improved reading but it was a surprise to see the positive figures last week so we could also get a surprise figure at the end of the week with the revision of GDP not being quite as good as expected.

If you’re not one to take a chance on the outcome of the data release and have a currency requirement in the near future then please contact your account manager at Currency Index who will talk you through all the options available to you.