Sterling Rallies On
21 November, 2013
Wednesday was another strong day for the pound as it managed to make gains against most of the majors. The Bank of England minutes came out as expected, not showing any surprises which gave traders already confident with the Pound nothing to change their views.
The pound crept up steadily against the antipodean Dollars and the euro especially, making 2 cent gains against the Kiwi and over 1 cent against the struggling Aussie. Over the course of the day we also made a cent against the Euro, aided when the US markets opened. The Euro on the back foot already after German inflation figures came out lower than forecast, tumbled further when the US retail sales posted a larger than expected increase. Traders took hold of the Dollar, which strengthened across the board in afternoons trade, which took sterling up with it against the single currency – obviously now the less favored of the three major traded currencies. This is back to trading patterns we saw earlier in the year where the euro, sterling and the US dollar were closely linked with all three having inadvertent effects on the other. So the afternoon saw the dollar gain and the pound gain against all but the US dollar and the Canadian “loonie” which strengthen by a cent despite lower wholesale sales figures.
The USD gains were limited in the evening though as markets reacted negatively to the FOMC Fed minutes, which reiterated that there would be no change to the QE policy while data is not supportive of economic growth.
Today we have some key releases early doors, being EU market PMI and UK public sector net borrowing figures. Over in Australia Governor Stevens makes a speech at 9am, so could throw up some further volatility for the Aussie for any buyers out there. Mario Draghi the ECB president makes a speech at 10am so again, possible volatility for the single currency which with recent gains at resistance point, could push buying rates lower if markets take comments positively, so keep in touch if a Euro requirement is on the cards in the near term. Finally, a raft of US data including inflation figures rounds off the day – could we see the dollar continue its gains of yesterday?
Much to move the markets so make sure to stay in touch with the Currency Index team to keep abreast of market movements. Timing is everything and can cost thousands if misjudged, so let us help make the most of your pound by contacting us today.
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