Quite markets (Euro standing strong)

21 June, 2013

Graham Harborne

A busy week in the markets but not really for the pound which could be a cause for concern. In brief the markets were actually fairly subdued yesterday though the pound did pick up a little in the afternoon following its steady weakening throughout the week.

The week started with the Euro very much being the stronger currency amongst the 3 trading majors. Following the expected rate cut last month from the ECB we have seen the Euro gradually strengthen as the more positive side of the rate cut begins to take affect coupled with a number of positive data releases. The USD however has been struggling lately as a more positive vibe in the markets has help improve risk appetite therefore leading to the stronger pound and euro. Having said that, on Wednesday evening FED chairman Ben Bernanke left the door wide open for their exit from QE which our regular readers will know often puts pressure on that economies currency. The dollar strengthened 2% on the back of these comments and it just goes to show how quickly the markets can move.

As I stated earlier the pound has been very quiet, trading mainly on the back of USD/EUR movements. Should you be concerned? Possibly not as it shows that it really isn’t too exposed to drastic EUR/USD movements but something to consider is the data released in the UK this week. All data has come in above expectation (quite significantly in the case of retail sales) yet the pound has failed to extend higher, in fact its tested monthly lows and therefore the question has to be asked what would have happened to the pound if the data had been poor?

You may well be considering a sending money aboard in the next few months and be thinking you have time on your hands and that its nothing urgent, but be aware that we could lose these levels quite quickly if we get any poor data release over the coming weeks. Keep in touch with your broker here at Currency Index who can always help you send money aboard