Pound steals more ground

Yesterday saw a continuation of the pound’s current run of strength following Tuesday’s gains after the inflation reading came in at 1.9%, up on the prediction of 1.6% and just under the BoE target of 2%. Wednesday morning saw UK unemployment figures released showing a fall to a 6 year low of 2.12m, whilst the rate of unemployment in the quarter fell to 6.5% from 6.6% in the first 3 months of April. As a result against the Euro it gained almost 0.5 of a cent, whilst against the dollar it gained only 40pips in the mornings trading which was eroded in the afternoon following some positive US Production data. Elsewhere we had the Bank of Canada interest rate decision which had the potential to shake up CAD rates – however it remained the same at 1%.

Today we have a fairly quiet day in the way of data, with the only release of major note being Euro CPI data at 10.00am. With analysts expecting a bullish increase to 0.8% from a previous 0.7%  this result would give the Euro strength. However take note that should the single currency miss the mark on this data release given the 2 days of positive news for the pound, we could see rates push further. However on the other side of the coin a positive result could quickly tip GBP of its precariously perched position of strength, particularly given the recent rapid growth across the board.

Any of you with upcoming transfers that include buying or selling GBP, particularly those involving Euros would be well advised to stay in close contact with your CI broker. Given the rapid expansion in rates across the board we may well soon see a correction/ contraction in rates as some suggest the pound could soon run out of steam. Add to that the suggestion that there may be amendments to the US bond scheme and the yet- to-be seen effects of the ECB interest rate decision it is likely to be a turbulent few months on the market.

Speak to your CI broker today for some friendly and professional guidance on how to get the most out of your currency transfer. Currency Index can help you stay well ahead and well ahead of the market.