Sterling strong ahead of the long weekend

23 May, 2014

Matthew Boyle

It has been little surprise that this week has been another turbulent one for the majors, as the past few months have been extremely exciting in the currency markets. We have seen a significant shift in strength and where investors are placing their money with the pound at present sitting strongly and proudly on top of the pile.

Earlier this week we saw the UK post hugely positive retail sales data which started the Pound’s assault – growing 6.9% in April, the best in 10 years and double the expectation. This was a strong signal of the current UK and GBP strength and we saw the markets react as such taking the pound to a 2 year high against the Euro.

Similarly against the USD the pound is continuing to lay pressure on heavily and continues to push the greenback close to a 5 year high. Interestingly both are set to show revisions to their current Q.E programmes so those of you with upcoming requirements may want to keep a close eye (or indeed ask your CI broker) as when these announcements occur the respective rates will go haywire.

Yesterday was a slightly less positive one for the pound as whilst we saw fairly positive GDP data – all coming in on expectation, we saw a huge increase in Public Sector borrowing and a figure way over what was expected and as such priced in to the market. The net figure showed at 9.361BN up from an expected 3.5BN, and while this piece of data was not one of major note, the big difference in figures caused the pound to stall in its gains slightly and albeit minor, lose a small amount of ground significantly against the majors.

As we move through to today’s trading it is a much more quiet one for majors data, with some German GDP data for the Euro in the morning and Italian retails sales, so without any shock results it is likely we will see the Majors stay fairly range bound at least for the short term. This will no doubt change next week.

This afternoon elsewhere in the world we have CAD CPI data, so any of you with Canadian Dollar requirements would be well advised to stay in close contact with your broker.

Certainly If any of you have upcoming transfers to make, speak to your CI broker today for some friendly and professional guidance on how to get the most out of your transfer. With the pound currently riding high against almost all of the board it is certainly a great time to purchase currency, and can of course help you save money for those of you buying property overseas. You might like to consider one of or alternative buying options like a forward contract which would allow you to take advantage of the very strong position the pound currently finds itself in, for the ever present fear that it simply may not last. So speak to your Currency Index broker today – we can help you stay well informed and well ahead of the market.