One step back one step forward

14 July, 2017

Paul Newfield

After the losses of over two cents made by the Pound against most of the other major currencies, earlier this week following Theresa May’s speech, the Pound has, over the last few days clawed back its position, rising nearly a cent yesterday assisted by the BoE credit conditions survey was announced with the news that lenders will have to employ stricter criteria to borrowers, including those that want a mortgage, due to more and more people defaulting on their loans, particularly credit cards, a move that perhaps points to more and more people struggling due to higher gains in inflation over wage rises.

Elsewhere, the number of houses on the books of estate agents has dropped for the 16th month in a row, making it even more difficult for 1st time buyers to get on the property ladder which, whilst certainly not expected to help the Pound, did little to stop the improvement of £-€ rates in particular.

Whilst the Pound has improved slightly over the last couple of days, there is little in the way of any eco stats published from the UK before Tuesday to give the Pound any continuing forward momentum and has already fallen back this morning by 20 pips, as traders take advantage of the better prices yesterday, selling off their positions. With no UK data today, this is quite likely to continue.

Janet Yellen continued her testimony yesterday about the state of US finances and this caused the USD to strengthen against the Euro but weaken against the GBP – the USD has been steadily declining this year due to the Federal Reserves’ rate hiking initiative. Jobless claims came in better than expected, pushing the Dollar up farther.

Today sees trade balance from the Euro zone and retail sales and inflation figures from the US, with both in the position to strengthen themselves against sterling – with date from Europe and the US today and on Monday, with nothing from the UK to help, it may be wise to secure your currency before, should the rate drop any further.