Pound down following positive USD and EUR data
28 July, 2015
Yesterday was a poor day for the pound as it lost ground against both its major counterparts – the USD and the Euro, in a day where there was no data of note from the UK. Positive IFO climate data from the Eurozone in the morning helped the Euro continue its gains against the pound, which began following the news last week that Greece were edging ever closer to a 3rd bailout. In the afternoon US Durable goods orders showed a notable increase up to 3.4% from a predicted 3.0% in the month of June, which also allowed the Dollar to gain against a pound which had no data releases to help it fight back. Interestingly thought the pounds losses against the USD were slightly aided as the Euro continued to strengthen against the US Dollar, and as a result in the afternoon GBP/USD stabilised and much of the loss was eroded.
Today we have a busy day for data from the UK and US, offering the pound a chance to cause movements. This morning we have UK Q2 GDP which could certainly cause a shift in rates. This afternoon the focus moves across the pond to the US as a raft of data is released including home price index, Markit services PMI and consumer confidence. With the Euro almost totally silent today it will be an interesting watch to see how the markets react following today’s releases. With the Euro gaining ground since last week against both GBP and USD, poor releases today could see this continue, particularly if the US post weak results this afternoon which would likely aid the Euro further against the pound.
Should you have any upcoming transfers to make speak to your Currency Index today. Despite it being quiet in Europe today, data elsewhere could still allow the Euro to gain further and for the rates to drop. Whilst the UK and US may be leading the way towards an interest rate hike which would help push rates up, this could still be a long way away, and in the short-medium term as Greece work furiously to get the much needed bailout we are likely to see rates continue to drop. Certainly those of you with a transfer requirement in the coming months would be well advised to speak to your CI broker today to consider a forward contract – a great way to secure your rate with a small amount of capitol, and to protect your rate in what is a volatile time in the market.
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