By Simon Eastman
As we round of the week and the month with the consumers dream of Black Friday, where retailers push their wares with apparent huge discounts, will there be any opportune deals for those with sterling in hand looking to buy a foreign currency?
We saw sterling benefit from the Thanksgiving holiday in the US yesterday as the US markets remained closed, allowing the pound to remain unchallenged throughout the day as it made gains against the single currency and the laboured greenback.
GBPEUR traded up at the top of the recent range, given a boost from the poor set of German inflation figures which came out yesterday lunchtime. The consumer prices came in negative on the monthly figure at -0.7 percent, compared to the expected -0.5 percent and missed the expectations on the yearly figure coming out at 2.4 percent rather than the 2.6 percent forecast. Speeches by European Central Bank members Lane and Elderson did little to appease trader sentiment towards the single currency as it continued to weaken against both sterling and the US dollar, although once the European markets closed and there was no US to take over, the US dollar gains were lost once again.
GBP USD has changed tone this week, going from a 3 year low for those buying the dollars, to a sterling gain of nearly 2 cents in as many days, almost certainly helped yesterday by the lack of market activity across the pond. It might be worth taking advantage this morning for those looking to buy USD, to take advantage as once the US market opens again after lunch, those Black Friday bargain dollars may well sell out, and a run on the pound may make those dollars pricy yet again.
Black Friday and month end start off with German retail sales to set the tone for the day. A lower than forecast figure could once again lead to a euro sell off, but given the tight range GBPEUR has been in of late, if the figures come out positively, we could quickly see a move from the top to the bottom of the range. German unemployment figures are up next ahead of the UK money supply figures and Financial Policy Committee meeting and minutes, which will be quickly overshadowed by the EU inflation readings and a speech by ECB member De Guindos and German Bundesbank President Nagel. The day, and month round off after lunch with Canadian GDP. Finally, for those interested in Swiss Francs, we also see their GDP released this morning.
As always, get in touch with the team here for some friendly guidance on your upcoming currency requirements.