Pound hits 3 year high against US Dollar
14 February, 2014
As the week draws to a close we find ourselves sitting at or very near multi-year highs for Sterling against most currencies. You have to go back to the very beginning of 2013 to have rates as good against the Euro and as for the Dollar; the rates have not been this high since mid 2011. This is great news for those of you buying with Sterling in the near future, and is a direct result of the governor of the Bank of England’s quarterly inflation report on Wednesday which gave the Pound a significant boost.
The governor, while reining in expectations of imminent interest rises as a result of dropping unemployment, did however leave room for at least one rise this year and a total increase to around 2% in 2017. Higher interest rates mean higher yields for investors, and therefore more investors and as a result a stronger currency.
What this means for you buyers is a great opportunity to secure your currency, if for an immediate requirement on a simple spot contract or if for a requirement a little further down the line then a forward contract. You CI account manager will be able to explain the benefits and options for you, so make sure you stay in close touch with them.
Today is a relatively quiet day on the markets, with the only real data of note being a series of GDP releases from the Eurozone. We have already had French, German and Spanish figures, with the first two stronger than expected and the third as expected. We still have Italian, Greek and Portuguese figures to come and the overall Eurozone figure which of course is the main highlight. With the two biggest economies – Germany and France – posting slightly stronger figures it is worth watching for the overall release carefully as a more positive figure could strengthen the Euro and push down the high rates we are currently experiencing.
With this risk in mind any Euro buyers should make sure to keep their CI account manager on speed dial this morning!
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