Pound continues to make gains

This week has seen continued Sterling strength with the Pound making slow gains across the board. Most notably it has maintained its slow crawl against the Euro and also against the USD. Mario Draghi’s speech yesterday showed a strange change to his usual rhetoric as it was a change to his normal “talking up of the Euro” and instead delivered a slightly more downbeat announcement. With news ECB interest rates will stay the same at 0.25% the market initially reacted in favour of the pound with rates rising by around half a cent, however as his speech continued and with the ever present mention of Eurozone recovery the markets corrected and the initial gains were eroded leaving GBP/EUR rates almost exactly where they were prior. Interestingly Pound strength and the resulting trend seems to be ongoing at present. With the USD particularly weak at present given their debt crisis and apparent lack of clear instruction on how or indeed when this will be addressed, we are seeing extremely good dollar rates. This is also weighing elsewhere in the currency markets, as many analysts still feel that if it were not for the weak USD and migration of investments to the Eurozone we would likely see GBP/EUR rates a cent or two higher. Certainly until the USD crisis is at least part resolved it is likely we will continue to see a weak USD, with the Euro fighting ferociously to keep the GBP rates down. That said with the fore mentioned GBP strength at present continued positive data is likely to only aid the pound in maintaining its slow gains against single currency. However also be aware that in recent months the Pound has seen an almost non-stop stream of positive data releases, so any slow in this could see the pound unsettled from the dizzy heights it is currently experiencing. Today we see 3 major releases of note – UK Industrial and manufacturing data and Eurozone GDP early morning with US non-farm payrolls and unemployment following this afternoon. So today will no doubt see movement as the 3 majors continue to duke it out, with at least at present the Pound winning the fight. Should any of you who have imminent or upcoming USD or Euro requirements (whether buying or selling) would be well advised to speak to your Currency Index broker today for some professional and friendly guidance. Without doubt at present we are seeing a complicated and slightly strange set of circumstances driving the rates, Currency Index can help you stay well informed and well ahead of the market.