Has the pound hit its peak before the referendum
26 April, 2016
The last couple of trading days have seen the pound claw back some ground on the Euro as it reaches levels not seen for over a month. The pound has been on a negative spiral since the turn of year and with these gains saw a more advantageous opportunity for Euro buyers. Many of our clients are taking advantage of a forward contract as the EU referendum draws closer and rates start to become more stagnant. The recent spikes are seemingly being driven by sentiment as recent polls are suggesting that a Brexit likelihood seems slimmer than once thought but if the past elections and referendums are to go by these polls released in the press can have no effect on the actual outcome whatsoever so with that being said as we edge closer to June 23rd sentiment may well swerve in the opposite direction.
Yesterday’s data releases were ineffective to the market and as result saw Sterling’s volatility come to a steady halt, this could be now evident that the Pound has reached its peak and may begin a journey once again on the decline. As we have seen in the past few months these peaks do not last very long but are great buying opportunities should you have a requirement in the future, for example this recent spike in the GBP/EUR could have saved you £10,000 on a £200,000 property abroad. The pound has also gained over a 2 month high on the dollar as negative new home sales came in with a 2.5% lower than expected figure give sterling a surge on the Greenback.
Today again sees a quiet day in the way of data and that being said could trigger a Sterling decline. In the afternoon the US post durable goods orders at 12.30 and later at 13.45 markit services PMI. The currency market doesn’t stick around for anyone so if you have a requirement coming up in the future it may be worth considering snatching it whilst you can, talk to your account manager here at Currency Index about your options.
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