Dining with the US for today’s data

25 July, 2013

Rob Bastin

Wednesday’s trading was another quiet affair for the pound with just a 50 pip spread on the daily high/lows against both the Euro and the Dollar. After a good run following last week’s surprise Bank of England minutes, the pound has reached its peak for now with small losses over the last 24 hours against most major currencies. The only real data to note yesterday was the PMI Manufacturing and Services figures for the Euro-zone which were released first thing and PMI manufacturing for the US at lunch time. All posted a better than expected result, subsequently aiding a negative move in the sterling exchange rates. Overnight the Royal Bank of New Zealand announced their latest interest rate decision and confirmed a further hold at 2.5% but backed this decision up with comments that the removal of stimulus may not be far away as the economy in New Zealand continues to grow. These upbeat comments saw the Kiwi gain a cent against the pound whilst also hitting a 5 year high against the Aussie Dollar. Exchange rates are now near a 1 month high against the US Dollar and a 2 week high against the single currency, however that could all change this morning with the first major data release of the week. At 9:30am we will find out the first GDP figures for the second quarter in the UK. In the first quarter of 2013 the UK economy grew by 0.3% and analysts and expecting a further growth of 0.6% in the second quarter and 1.4% from last year. At a glance this all looks very positive and if confirmed we should see further support for the pound. However many view these predictions as rather optimistic and anything short of these expectations could see a very different outcome on the markets. After a quite few days this data is set to be a key release that will likely see the first real volatility of the week. If you are looking to send money abroad over the coming days, keep close contact with your broker to be updated on the news and how it has affected the cost of your transfer.