Normal trading resumes

29 March, 2016

Rob Bastin

Last week was on the whole a very damaging one for the British pound with Sterling exchange rates dropping over 4 cents against the US Dollar and hitting a new low for the year against the Euro. This drop was mainly attributed to the negative trend ahead of the summer referendum, but was also aided by further poor data with inflation levels still struggling to pick up.

Thursday did see a small spike in exchange rates ahead of the Easter weekend after UK Retail Sales figures were confirmed to have grown 3.8% as expected, and contracted by less than forecast at just -0.4% during February. Markets had been expecting a deeper contraction and although these figures were ultimately better than the consensus, they are still significantly down from the previous month. In the afternoon US data was a mixed bag of results with jobless claims strong but Durable Goods Orders disappointing. The dollar remains in a strong position, despite the markets postponing expectation of the next US rate hike.

Whilst the UK have been on a nice long weekend, the markets do not take such a break and have been trading around the world in our absence. On Friday US GDP was confirmed at 1.4% annual growth, again better than 1% prediction from analysts. Despite the stronger figures there was little movement on the market with lower liquidity levels and after the Dollar had already made good gains throughout the week.

The next few days offer very little as far as important data releases are concerned, particularly for the UK as we head into the end of month. Thursday morning will see the latest growth figures for the UK at 9:30am with Euro-zone Consumer Confidence shortly after at 10am. Friday will be the usual busy start to a new month with a host of major releases including UK Manufacturing PMI at 9:30am, Euro-zone unemployment rate at 10am and the big US release of non-farm payrolls after lunch at 1:30pm. To discuss the potential impact of any of these announcements on your currency requirement, contact your broker today on freephone 0800 043 2623.