Pound starts week on the up
24 September, 2013
After Thursday’s and Friday’s losses, the pound started the new week back on the front foot as traders started re-buying sterling positions as the markets opened Sunday night.
GBP/EUR is now back up by 1 cent from the market open last night, recovering half of the losses seen end of last week. This is all in the absence of any note worthy data as the upward trend remains the main driver of exchange rates over the coming days. Exchange rates are now however back below the key resistance point and so any short term buyers holding out for higher rates in the 1.20s may want to revise their targets as we expect to see rates stabilise at current levels without any further economic drivers. Anyone holding onto Euros still that they wish to sell would be wise to keep a close eye on short term spikes in your favour as there is an increasing likelihood that we will not be seeing much better selling rates moving forward.
Yesterday saw the latest Euro-zone PMI figures released which were largely better than expected with the exception of the manufacturing sector. The markets took more notice of the negativity as the Euro dropped against both the pound and the dollar. At lunch time president Draghi reiterated that “the key ECB interest rates are to remain at present or lower levels for an extended period of time” whilst commenting that the Euro-zone economic situation should continue improving gradually.
Today’s key release is the consumer confidence data for the US at 3pm. The dollar has been on the downslide recently since the Fed meeting last week and so a drop in this figure is to be expected with analysts expecting a result of 79.8 compared to 81.5 previously. This week is quiet for the pound until Thursday’s latest GDP figures so expect relative stability in exchange rates unless overseas data comes in to play.
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