German GDP set to improve Eurozone confidence.

25 February, 2014

Tom Arnold

This week has begun very much as the last week finished, with Sterling under pressure. The UK has released a couple of slightly weaker economic numbers recently which has led to a drop off in the Pound’s position. Some analysts fear this might be a shift in sentiment away from the until now strong Sterling, but it is very uncertain as none of its competitors are pulling up any trees, and the recent data, while weaker, has not exactly been catastrophic. There does also seem to be a fairly strong support level below the Pound at the moment, which it has spent much of the last couple of days sitting on.

Today there is a reasonable amount of data due out. We have already had New Zealand Inflation and German GDP – both exactly as expected, and both providing their respective currencies with a few early morning jitters.

Later this morning we have UK mortgage approvals, followed by European Commission Economic Growth Forecasts and the Inflation Report Hearings. This is an opportunity for the Treasury Select Committee to scrutinise the Bank of England’s performance, and in light of Mark Carney’s happiness to speak about his future expectations, can cause Sterling volatility depending on what he says. Could this be the straw that breaks the back of the support level camel?

With the Pound coming off the back of recent highs, it would seem like now might be a good time to take advantage, if you have an upcoming currency requirement, before at the least a return to uncertainty and at worst a continued drop materialises. Make sure to stay in contact with your CI account manager to be kept informed of what is happening and what your options are.