The Pound the unlikely winner this week
19 August, 2016
This week has been a slightly unusual one for the Pound in recent times, with a more positive set of data producing some gains for the otherwise pressured UK currency. We have seen higher than anticipated inflation numbers and staggeringly high retails sales figures, both of which caught the market unawares and caused improvements for the Pound. The data we are seeing now, is largely from a post-Brexit-vote time scale and as such anything positive is quite a surprise, given we have been expecting everything to slow down in light of the vote to leave the EU.
The market has otherwise been very quiet, with little data from Europe and only the FOMC minutes on Wednesday to trouble the US markets. This has produced a window of opportunity for the Pound to take advantage and as such we have seen multi-cent gains against both the US Dollar and the Euro.
The aforementioned FOMC minutes were interesting because they were so mixed, with no clear direction evident with regard to future interest rate hikes and as such this put the Dollar under a little pressure, aiding the Pound in its push back against the Greenback. The Dollar is still undoubtedly the dominant major currency but a lack of decisive policy from the FED leaves in vulnerable to short term losses.
For those with Sterling in hand and a currency purchase on the horizon, the rates are still very much lower than they were leading up to the EU referendum, and opportunities as we have seen this week with the Pound making some gains are likely to be few and far between. Make sure you stay in close contact with your CI account manager so that we can help you to use a spike in the market to maximise the exchange rate that you achieve.
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