Pound gains against Dollar but Euro remains solid

14 June, 2013

Matthew Boyle

Yesterday saw the pound gained against the dollar for a third week in a row – the longest winning streak since September of last year. This could largely be due to UK housing data which showed that house prices in England and Wales rose 0.4% from April but were also 2.7% up from the previous year. This combined with some confusion over the US credit rating , which this week was upgraded by S & P to stable from negative, whilst however the Fitch rating system continues to hold them on a negative standing. The pound move to a 4 month high against the greenback yesterday, with the pond now gaining 4.1% in the last 3 months- the best performer in the Bloomberg Correlation-Weighted Indexes which tracks the performance of the top 10 currencies. Interestingly the dollar fell 0.4% and the Euro appreciated 2.4%. Despite however the pound starting to show some recovery, it still cannot seem to push out the recent range we have seen with the Euro. Perhaps the fact the on the Bloomberg index the Euro is showing appreciation is a sign that the Eurozone is making steps towards recovery, or at least demonstrating that. Interestingly whilst the Euro and Pound made gains against the currently weak dollar the GBP/EUR rates have struggled to push either way out of a 2 cents range for almost a month now. Certainly though the tug-o-war that has been ongoing between the Pound and Euro is likely to see movement in the near future, as without doubt the single currency is far from out of the woods of recovery, and with the pound seeing the new BoE chief Mark Carney starting in a few weeks and with the fear of further Q.E looming. With Eurozone CPI figures today that are predicted to be positive, in what is a quiet day for data it is highly likely we will see a shift – the question is how much? If you are buying or selling Euros it would be wise to speak to your broker asap as this finely balanced GBP/EUR rate may not last. Elsewhere in the world the Japanese Yen reversed much of the recent trends and made gains against many of its major counterparts as the Bank of Japan announced it would ease volatility in bonds. Whilst in recent months JPY has been decimated this gain would be much welcomed. If you have any upcoming need to be sending money aboard particularly those involving GBP sure you speak to your Currency Index broker about your transfer now – we help you stay well informed and ahead of the markets.