Have cake and eat it Strong day for Sterling

30 November, 2016

Matthew Boyle

Following a quiet start to the week, yesterday saw a much busier day in the way of data releases, and as a result increased volatility with rates. In the morning we saw a raft of Eurozone data released including most notably German import price index and French GDP, which was closely followed by UK mortgage lending, money supply and lending data. Whilst Germany posted slightly better than expected figures, the bigger release of French GDP came in as expected. However it was the Pound that was the mornings winner as it showed increases in both Consumer lending and mortgage approvals which saw it begin to strengthen across the board. And this was despite the news yesterday showing a parliamentary aides Brexit notes that had been secretly photographed, suggesting the plan was for the UK to “Have cake and eat it”. Westminster quickly distanced itself from this statement which could have been largely detrimental to the pounds fortunes.

Data releases didn’t slow throughout the day as we moved into the afternoon with a range of Eurozone confidence and sentiment reports, alongside German inflation stats. It was more bad news for the single currency as almost all of these came in worse than was expected which only allowed the Pound to continue its gains. By the end of the day’s trading the pound had stolen around 0.5 of a cent, now taking it close to the best levels against the Euro we have seen in nearly 2.5 months. In the afternoon the USD took centre stage as the US also released GDP, consumer confidence and Redbook index data. In what was a fairly mixed bag this caused the greenback to stall slightly against the single currency, giving back some of the earlier gains following poor Euro data, and closing near to the days open. The pound was however the winner of the day from the 3 major currencies as it also gained almost a cent against the USD.

Elsewhere in the world late last night we also saw a number data releases from the other side of the world as the RBNZ released the New Zealand financial stability report, Japan release industrial production figures, and a number of construction and confidence reports from Australia.

Today is another very busy day as we see a large number of key Euro releases in the morning including Eurozone inflation data and also a speech from Mario Draghi. In the afternoon the focus shifts across the pond to the US as they release stats including consumption, oil stocks, expenditure and home sales.

Given it is a relatively quiet day for the pound will we see yesterday’s gains reversed? Certainly with so much going on it will be a very busy day across the currency board. Those of you with upcoming requirements would be well advised to speak to your Currency Index broker today to avoid any costly movements in rate which may affect your purchase. As aside from these daily data releases there are also huge underling economic issues at present which could result in large movements in currency rates in the coming weeks – the impending Italian election, Brexit legal challenge and proposed US interest rate hike to name but a few. Speak to your Currency Index broker today for some friendly and professional guidance on how you can protect your rate and avoid a costly disappointment. Currency Index can help you stay well informed and well ahead of the market.