Storms ahead for exchange rates on the currency markets
3 June, 2014
As the new trading month and new quarter got off to a start it was a fairly lacklustre day for sterling, as we saw little movement as the pound traded against most currencies in a fairly small range. It’s the start of the month, which means the various PMI figures are released both here and across Europe and yesterday was Markit Manufacturing’s turn. Across the EU most figures came in lower than forecast, while the UK hit its forecast of 57, which is well above the base mark for growth (50) and significantly better than any of its European counterparts. But with UK mortgage figures coming out lower than expected the pounds gains were limited unfortunately and we saw little positive effect.
When US markets opened at lunchtime, we saw sentiment trading, with the pound clearly back in favour as some gains were made across most majors including the Canadian and US dollars. While sentiment is buoying up the pound we will have to see if the data coming out over the next few days can back that up and help the pound push on.
This week’s major release though is the storm that could be the central bank policy meets on Thursday. We expect no surprise form the Bank of England but all eyes are on the ECB as to whether they will make any changes to current policy. A rate cut or QE announcement could throw up some serious waves in the market so anyone looking to send money to the Eurozone might be prudent to look at locking something in beforehand. This could be a pivotal moment in the recent trading pattern so make sure you stay in touch with a CI broker to keep abreast of any changes.
Today we have already had Australian interest rate decision, showing no change. We will await the minutes later in the month for any statement. This morning EU CPI and Unemployment figures are out shortly and UK Construction PMI. Some low key US figures round up the afternoon.
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