USD surges on whilst GBP and EUR battle

Yesterday was a fairly busy day in the market for movement particularly for GBP. Whilst house price data in the morning showed a downturn, production data showed an increase and the overall effect saw the pound rally slightly against both EUR and the currently strong USD. These small gains were however short lived as the day progressed and further data was released. In the early afternoon we had the ECB interest rate decision and jobless claims from the U.S – 2 pieces of data which have a much larger impact and as such it was the afternoon that brought the most action. The ECB Interest rate decision came first with no change, interestingly EUR began to weaken off slightly against the majors, and for GBP this gave further gains we saw from the morning taking the movement in GBPs favour to almost a cent. However when Mario Draghi began to speak this gain was eroded fairly rapidly, albeit leaving around a 40 cent gain. With further stimulus being suggested for the Euro zone it is perhaps the continued delay for this that is causing volatility as investors gamble as to exactly when this will occur.

Shortly after the ECB eyes moved across the Atlantic to the U.S as reports came in that jobless claims had reduced to 2.348m from a projected 2.36m and add to that non-farm activity came in 0.5% above expectation at 2.0. Following these results the currently on fire USD slowly took around a cent against GBP, whilst against EUR it jumped around ending the day near the start – perhaps largely due to the similar timing of the reports. Certainly though at present USD is the strongest pick of the 3 and the one to watch, with it seemingly regaining its safe-haven status more by the day and also adding to the woes of some of the weaker currencies as we see a shift in global investment.

Today we have the following major pieces of data:

• 9:30am (GBP) – UK Goods Trade Balance
• 1:30pm (CAD) – Unemployment Rate
• 1:30pm (USD) – Non-Farm Payrolls / Unemployment Rate

Whilst it is not a huge day for data in the market it will no doubt still be a busy one. The majors are finely balanced at present – with ongoing talk of stimulus in Europe, debate over interest rates in the UK and the U.S seemingly to have dodged the “fiscal cliff” we were so warned about 2 years ago at present it is a melting pot. It is likely to come down to timing as to how this plays out. And indeed with all currency transfers timing is key, so should you have any upcoming transfers to make speak to your C.I currency broker today for some friendly and professional guidance on how to get the most out of your transfer. Currency Index offer a number of ways in which you can order currency which can help protect you and your rate in such a turbulent time – an invaluable tool if you are looking at buying a property, have staged payments to make, or indeed run a business and would like to help manage your expenditure.

Currency Index can help you stay well informed and well ahead of the market.