Wednesday’s trading provides some key UK data for the currency markets.

27 February, 2014

Rob Bastin

Following an extremely flat start to the week, Wednesday’s trading provided some key UK data which triggered some market fluctuations as the day developed. The headline news was that of the latest economic growth figures for the UK which were far improved from previous revisions all be it slightly short of analysts’ expectations. Figures confirmed that the UK economy grew by 0.7% in the fourth quarter of 2013 bringing the annual growth up to 2.7% from 1.9% previously. These figures were accompanied by improved business investment figures for the UK which were revised up to 2.4% from 2% in Q4. It took a while for the markets to react to these figures but once the US markets were open we started to see the pound pushing higher against the Euro nearest its recent highs again. Anyone with an up and coming requirement Euro requirement may wish to contact your broker to discuss a forward contract that can allow you to take advantage of these rates whilst they are available.

It was however a very different story with the USD that had a very strong afternoon following some positive New Home Sales figures and this saw the greenback claw back over 0.5% against both the pound and the Euro. Having been so weak recently the USD is in the prime seat for a short term rally and could be boosted further today after the news releases at 1:30pm that will cover jobless claims and durable goods announcements. This morning it is the Euro that is in focus at 10:00am when we see whether confidence has improved within the Euro-zone for their industrial, services and business sectors. German unemployment figures could also impact the markets at 8:55am whilst we wait until 1:00pm for their latest inflation data.