Sterling Gains Are Stunted

As the markets got back to it following the extended Easter break we looked towards a raft of Markit services PMI data from across Europe and the UK.

Most of the figures came out as expected from across Europe apart from France who missed their expectation. The EU as a whole also missed the forecasted figure so we saw the single currency take a dive against sterling following the better than expected UK PMI, which came out significantly higher than any of the other readings. The pound managed to make a cent against the euro but having hit a key upward ceiling of resistance, failed to improve further and just traded range bound for the rest of the day’s trade.

This was the case against most of the main traded currencies, although the pound to US dollar rates did fluctuate out of line with other currencies. Cable traded in a 1 cent range all day, initially the dollar got more expensive, despite the positive UK data whilst the pound then made those gains back only to lose them again once the US market opened and we digested a few low key US ecostats. It seems the dollar is still favoured with investors and this is unlikely to change to much especially with the undertone of scepticism over how the UK general election will turn out next month causing the pound so issues.

Today we are light on stats to contend with so we could well see another day of more sentiment led trading. We see EU retail sales released this morning along with a credit conditions survey from the Bank of England. Once the US markets awaken, there is low key mortgage data ahead of the release of the Federal Reserve’s minutes tonight at 7pm.

Anyone with a dollar requirement, whether it be personal for that Orlando house purchase, or for business and those invoices from the Far East, it may be wise to secure your dollars today before the minutes release, just in case any monition of interest rate rises goes favourably with investors. Speak to one of the team today to discuss your requirements.