Purchasing figures out today, exchange rates likely to react
5 August, 2014
A relatively quiet start to the week yesterday, saw the Pound reverse some of its recent loses and rise a little against both the Euro and the US Dollar. The Pound has been on the back foot for some days now, following some surprisingly lower than anticipated economic data releases, and there is a feeling that we might have reached the limit of the Pound’s strength, especially with fears over the UK’s export situation being highlighted by the IMF. A strong Pound damages exports and this is obviously a significant worry as the UK tries to push towards full recovery.
It quite suits policy makers for Sterling to weaken a bit, so those of you looking to buy other currencies with your Pounds need to be careful not to miss out on these currently very good levels…
Today is all about PMI, with UK services PMI, European services PMI and US services and non-manufacturing PMI all due out. PMI stands for Purchasing Managers Index and gives an overall impression of the market conditions in a particular sector, in this case the Services sectors of the various economic zones. There is also European retail sales due as well. None of these releases are expected to be massive movers of the market, but we are in a slightly uncertain, potentially sentiment shifting time, with the Pound wobbling and the US Dollar seemingly resurgent again, so any failures are likely to be highlighted and reacted to more so than normal.
In other news the RBA held Australian interest rates overnight, which was widely expected. The Australian economic situation is pretty stable at the moment, and any rumours of changes seem to have been kicked into the long grass for now, making exchange rates relatively stable too.
Stay in close touch with your CI account manager if you have an upcoming requirement to be kept informed of exactly what is happening and what your options are.
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