Tight range = Tight belts

9 July, 2013

Graham Harborne

A fairly subdued day in the currency markets yesterday with little in the way of data releases and though there was a speech from ECB president Draghi, this had very little impact on the markets. The pound remained within a very tight range against the euro but did manage to gain ground against the dollar. Moving over a cent from the daily lows it is likely that this was a correction following perhaps over selling of the pair at the end of last week. We saw a huge move on Thursday/Friday with the Dollar gathering strength on the back of a surprise statement following the BoE meeting aswell as much better than expected Non-Farm Payrolls on Friday. Today see’s the release of manufacturing and industrial production data here in the UK and it is likely to yet again give us a clue to the economic recovery. The markets are already nervous about the stance that new BoE Governor Mark Carney will take and any poor data release is likely to pave the way for more QE or atleast some other form of monetary easing. A positive release could well give the pound some much need respite but is it just a case of delaying the inevitable. We also have the GDP estimate for Q2 here in the UK. Unlikely we will see any great surprises but again a negative reading will send tremors through the markets. So a possibly nervous day ahead which may well set the tone for the rest of the month. If you need to send money abroad. and dont want to risk the pound falling further then make sure you stay in touch with your account manager here at Currency Index.