Welcome boost

Wednesday’s trading saw a welcome boost for the pound following last week’s losses, with gains of over 1% at the peaks against both the Euro and the US dollar. GBP/EUR was already up in early trading coming up off the 1.1640 support level as rates continue to trade within a small range. Sterling’s rally was then aided by poor PMI figures for the Eurozone showing a worse than expected contraction, shortly followed by better than expected PMI services data for the UK that posted the fasted rate of growth seen for more than 2 years. With the services sector contributing to around 75% of the UK economy, these figures will go a long way to boosting confidence of a continued recovery over the coming months. Many analysts will however be on the side of caution as to how sustainable an economic recovery really is when it is being largely driving by household spending. The outcome of yesterday’s good news was the single largest daily gain against the Euro for 10 weeks, taking buying levels close to a 2 month high therefore providing another good opportunity for anyone sending money abroad in the near future. Once again the focus today will be on both the UK and the Euro-zone with each making their monthly interest rate announcements at 12pm and 12:45pm respectively. This will be the first meeting held by the new BoE governor Mark Carney and a no change outcome is widely suspected as he weighs up his monetary policy options over the coming months. The MPC minutes in 2 weeks will be of greater interest when the details of this meeting are disclosed. Likewise for the Euro, the rate decision itself is unlikely to throw up any surprises, but the markets will be listening eagerly to the tone of ECB press conference at 1:30pm. Before both of these announcements we have the final first quarter GDP revision for the Euro-zone which could set an early trend for the morning at least. As the market opens we have already had some positive housing data for the UK as Halifax figures confirmed a further increase in house prices of 0.6% in June, the markets however remain flat ahead of the main events to come. With a busy day ahead, particularly for those with an interest in GBP/EUR rates, make sure you keep in contact with your broker so that we can help you make the most of any imminent transactions. send money abroad