Markets react well to UK data

The main news dominating yesterday’s currency headlines was the unexpected drop in unemployment in the UK. Latest figures showed that unemployment had fallen by 5,000 whilst the average earnings were up by 0.9% from last month and 1.3% from this time last year. Subsequently the pound rallied to a 3 week high against the Euro and 4 month high against the US Dollar. Unfortunately these gains were short lived with the pound losing most of its gains as the day went on, underlining the reality of the unemployment situation in the UK, which despite some improving figures is still in a dire situation and is unlikely to lend any real sustainable support for the pound at this stage.

In news further afield, New Zealand last night held their interest rates at 2.5% as expected, and unemployment figures out of Australia were better than expected with the unemployment rate coming down by 0.1% and the number of people employed increasing by 1,100 compared a census of -10,000.

Considering the recent improvement in rates against a basket of currencies, now is a great time to be sending money aboard so make sure you contact your Account manager today to discuss any up and coming requirements. Besides the Euro and US Dollar, the pound is also trading at an 18 months high against the Turkish Lira, a 5 year high against the South African Rand and a 3 year high against the Australian Dollar.

Today sees the ECB Monthly report at 9am followed by the BoE Quarterly bulletin at midday, whilst retail sales figures for the US will be announced at 1:30pm.