Pound goes from strength to strength

3 July, 2014

Matthew Boyle

It has been a continuation of pound strength so far this week as we have seen the pound push and gain further ground across the board but most noticeably against both EUR and USD.

Following a relatively quiet and perhaps stagnant start for the pound Monday, Tuesday data releases which allowed a degree of momentum to take effect.

Following Manufacturing PMI figures that came in above expectation (57.5 compared to the forecast 56.8) the pound gained around half a cent it had previously lost against the single currency and pushed the USD rate even higher.

Yesterday’s data releases saw pound strength as both Housing data and PMI data in the morning both came in above expectations. This only galvanised the currently strong pound which again clawed further ground against the other flagging majors. Eurozone GDP data released mid morning came in exactly on expectation and as such did little to slow the pound’s assault and by the end of the day’s trading the pound had pushed the single currency close to a 2.5 year high again, whilst against the greenback buying levels are now near a 6 year high. As the day’s trading closed comments from FED chair Yellen again did little to slow the pound’s advances. Those of you with USD requirements take note as given the recent advances in the GBP>USD rates and given the notions that shortly there will be an adjustment to interest rates or amendment to the current QE/Bond scheme in the US these rates may not last for very long. Indeed given the huge amount of Chinese and Far East investment in the US some analysts feel this could indeed change very soon. So any of you with either imminent or upcoming USD requirements would be well advised to speak to your CI broker asap to avoid any potential disappointment.

Today we have the ECB Interest rate decision and monetary policy statement mid morning. Whilst the ECB are extremely unlikely to make any change to interest rates given last month’s shock change, certainly the monetary policy could be an interesting release and may address much of the uncertainty surrounding last month’s deposit rate decision. And if recent form is anything to go Mario Draghi is always good at talking Euro strength so again, keep in close contact with your CI broker if you have any Euro transfers to make.

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