Sterling Correction Continues
12 November, 2013
The Pound started the week on the slide again following its corrective stance at the end of last week. For those regular readers, you will know that the ECB cut European interest rates on Thursday in a surprise move, which saw the Euro weaken dramatically and the Pound benefit across the board. A gain of 1.5 cents against the Euro was a welcome surprise for buyers but we saw the correction happen almost straight away as the euro gained back half a cent.
Friday was much of the same and it seems although the Pound started overnight Sunday/Monday trading in Asia fairly high, investors saw its value over priced and further correction started. This continued throughout yesterday as the Pound trickled back down to the next key resistance point. Any Euro buys still out there who did not take advantage on Thursday, don’t panic, the rates are still good and a whole cent better than if you were trading a week ago so it’s well worth speaking with one of the team to look at potentially forward booking your future requirements.
As yesterday was Remembrance Day across the world with many markets closed out of respect (including France, the US and Canada) it was a day of less activity than normal. Tuesday however, is back to normality as we have a string of key releases starting with UK RICS house price index which has already been releases (a little lower than expectation) and German inflation figures which have also come out lower than forecast. The markets will be waiting for the UK inflation figures at 9.30am before deciding on what GBP/EUR stance they take I would expect so make sure to stay in contact early morning if Euros are the order of your day.
This after the US has a few low key releases including the Redbook Index and Chicago Fed National activity index along with some bill auctions so we shouldn’t see too much volatility from the greenback from these, but again, as US traders were off work yesterday we shouldn’t expect a quiet day. Overnight New Zealand and Australia release a couple of updates including AUD consumer confidence.
The rest of the week is busy so if you have a currency exchange to make sure to stay in touch with your broker here at Currency Index or if youre not a client already, contact one of the team for some friendly guidance.
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