Markets enter the festive lull
20 December, 2016
Rob Bastin
As we begin to close in on the end of 2016 and the festive period, this week is unlikely to provide too much excitement for those who are still holding out for an end of year exchange. The week is absent of any key releases for the UK with only revised GDP figures on Friday being of any significance, by which time most banks and traders will already be in Xmas mode. This time of year rarely provides volatility with fewer traders active and therefore a significant reduction in market liquidity. Sterling exchange rates have already been very flat in recent weeks after an excellent performance in November, hitting 3 month highs against the Euro and US Dollar last week.
Since then the US have raised rates and GBP/USD is back to the same levels seen before the US election, with the US Dollar still very much in the driving seat. Yesterday’s trading saw a much weaker pound as traders are likely now cashing in their profits ahead of the holidays with further gains now very unlikely. GBP/EUR and GBP/USD both dropped over a cent at the peaks, with GBP/EUR hitting its lowest levels for 10 days as it continues to slip away from the 1.20 ceiling. The only data release to note was for US Services PMI that came in at just 53.4, a slower rate of growth than was forecast at 55.2. Despite the poorer data both the Pound and Euro finished the day lower against the Greenback.
With little to hold out for this week, if you are still requiring an exchange before Xmas then get in touch with your account manager today to fix your rate and complete your transfer before the festive weekend ahead. Failing this Currency Index will still be here to help after the bank holiday weekend and take you through to New Years eve.
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