Busy month for sterling data as the month draws to a close

By Luke Dyson

What a volatile month for sterling!

As the month draws to a close, we have seen a significant amount of day to day volatility for sterling. However GBP/EUR still has managed to remain in its multiple cent rangebound market.

With no clear breakout in sight, the market will need a strong stimulus to drive exchange rates higher or lower into a new trend.

We have seen a massive amount of UK data releases this month, which haven’t been particularly beneficial for sterling. Firstly with inflation still very high at 6.7% in direct comparison to the UK’s target of 2%.

We also have seen the Bank of England keep interest rates the same, and on the back of both of these, we have seen sterling tumble and lose some of its strength falling to the bottom of its current range.

Early this morning we have also seen another data release, the UK’s GDP figure at 07:00am. which has come back positive and better than expected at 0.6% above the expected 0.4%, although this data release hasn’t drastically moved the current market. It could well become a background buoyancy device for sterling moving forward in the months to come.

With the current market still bouncing between its 2 cent range, if you have any up and coming currency requirements please get in touch with your currency consultant today to get a strategy in place to limit your currency risk.

With the level of inflation and the interest rates remaining the same we could see sterling drop further, especially with the market so close to the bottom level of the multiple month range. if the market was to break out below and create a new low, we may see the market flow into a downward trend.