Pound and Euro Strength, Dollar weakens

Yesterday saw the more anticipated events of the week with the BoE and ECB meeting. The BoE announced no change to the current interest rate which is to be held at 0.5%, and interestingly there was no change on the vote for further Q.E to up its current level at 375 billion. In the current climate this was seen as relatively positive for Sterling as it continues to stave off further austerity measures, however many analysts still believe that when Mark Carney starts at the BoE in July it is likely we will see further Q.E later this year. So perhaps be warned that any current pound strength could be short-lived as certainly if and when Q.E takes place we are likely to see a considerable weakening of the pound. The ECB announced some bad news in that they were revising their growth forecast to a contraction of -0.6%, down on its previous prediction of -0.5%. However this bad news was balanced with Mario Draghi stating that the ECB had revised up their 2014 forecast to 1.1% growth, and certainly this announcement took away much of the sting of the negative GDP revision. With the Pound showing at least short-term strength and the Euro making promises of long-term recovery, the USD started to shake ahead of its unemployment figures which were predicted to come in poor. Whilst the result did come in slightly worse than expected the combination of Pound and Euro strength saw the markets begin to move early in the day and these swings seemed to become exacerbated as the days trading continued with some large swings seen in many of the major pairings. The pound gained almost 2 cents in the day against the dollar, and was helped in this move by Euro strength pushing the USD rate. This instantly reversed the 3 month low of the GBP/USD rate seen and is now put it on a one month high, whilst however the GBP/EUR rate remained relatively stable within its recent range with both announcing positive news. Now is a particularly good time if you are buying a number of foreign currencies from GBP, particularly USD, JPY, ZAR, AUD, NZD, TRY or EGP. Take note though – with Mark Carney due to start next month and the ever looming fear of Q.E on the horizon it must be asked if these rates will be short lived. So if you have any currency requirements coming up, speak to your currency index broker sooner rather than later to capitalise on these current opportunities. We help you stay well informed and well ahead of the markets.