Pound recovers after downgrade

23 April, 2013

Graham Harborne

Following Fridays Fitch’s downgrade which saw the pound lose some ground against the majors, yesterday saw a rebound. With no real economic data of importance released it was very much a case of GBP shrugging off the downgrade (remember a similar downgrade was made back in February) while continued worries across the board in the eurozone saw the bloc currency come under increased selling pressure.

Ahead of us today is CBI Industrial Trend and Public Sector Net Borrowing from the UK and this afternoon there is a raft of U.S data including Manufacturing PMI and New Home Sales so we could well see some volatility throughout the day.

We have already seen some huge swings this morning following the release of various European Manufacturing PMI data releases. The French data was good and saw the euro strengthen against both GBP and USD but 30 minutes later we saw Germany release their figures which were considerably worse than expected resulting in a swing back in the favour of the pound…moving ½% in a matter of minutes. Clearly there were good opportunities for both buyers and sellers alike this morning and the only way to take advantage of such movements is by keeping your Currency Index account manager informed of your requirements.