Industrial production for the Eurozone brings better than expected results

After a negative start to the week the pound was able to recover some of these losses during yesterday’s trading. Sterling actually took at early hit following the release of the latest UK inflation today which yet again saw a bigger than expected drop in the headline rate with inflation finally hitting the bank of England’s target rate of 2% for the first time since November 2009. Whilst this is good news for the prices of day to day goods, if inflation continues to drop and remains at lower levels then will be far less likely to see a rate hike in the UK any time soon as it is typically a cut in interest rates that is used by the Bank of England to combat weak inflation levels. Inflation will likely be a key factor over the coming couple of years to help guide the timing of interest rate changes once the unemployment figure has dropped to 7%.

Following the initial drop traders slowly began to re-buy sterling from its lower positions as current key support levels hold firm against both the Euro and the US Dollar with the pound finishing the day with small against each currency despite some positive data on both sides.

Industrial production for the Euro-zone posted growth nearly double analysts expected at 3% on the year compared to an expected 1.4%. In the US the afternoon release was for the latest Retail Sales figures which although down to 0.2% from the previous 0.4%, these figures were still slightly better than forecasts.

The day ahead absent of any significant data releases for any of the major currencies so expect further consolidation at present levels. Whilst the markets are calmer and sat less than 1% away from year highs, this provides a great opportunity for anyone to secure their up and coming currency needs market leading exchange rates with an award winning service!