By Ashley Finill
Yesterday saw a turn in fortunes for sterling as Positive PMI data in the morning rallied the pound against the majors, gaining over a cent on both the euro and dollar. This was an unexpected but much welcomed reading for the UK economy as analysts had previously predicted that the UK was heading for a recession with this latest reading suggesting otherwise. The PMI figure came in at 53 exceeding the figure of 49 predicted. This reading gave Sterling the boost is desperately needed as the previous negative UK economy releases over Christmas and so far in 2023 have been the pound’s downfall. The PMI reading of 53 shows growth in the UK economy while anything under 50 would be a contraction, it remains to be seen if this could be a turning point for Sterling, as we have seen in the past these gains can be sorted lived due to other contributing factors like foreign economies performance, political and foreign affairs. Yesterday data release has provided a great buying opportunity for those looking to buy currency. Currently buying €100k or $100k since Friday trading would save you roughly £1200 & £1450, respectively. If you have an upcoming requirement, Call your account manager today to take advantage of the current highs. We have various contract options which can suit you, giving you peace of mind that you aren’t caught out in ever changing unpredictable currency market.
War Rages on in Ukraine 1 year on
Friday marks a year to the day since Russia illegally invaded the Ukraine sparking war between the two countries. Support and togetherness has been shown towards Ukraine as sanctions were and still are imposed on Russia to try and deter the Kremlin’s intentions. However, this has not stopped a defiant Putin as yesterday he addressed the Russian people claiming that it is the west’s fault that the war has started. The Kremlin leader has showed no remorse and vows to keep going and now with the suspension from the nuclear treaty with the UN. The UK, US and NATO allies have provided aid, vehicles, and weaponry to Ukraine since the outbreak and vow to continue, something Putin despises. It had been reported last week that China was considering providing arms to Russia something which has been met with anger from the US with threats of sanctions imposed on China should this be true. China has categorically denied these allegations but relations between the US and China and seemingly quite frosty. Should tensions continue to rise and sanctions imposed on countries this is highly likely to influence the currency market as we saw last year when the war in the Ukraine broke out, Sterling being the overall loser out of the majors dropping with the YoY figure dropping by 7 cents on the Euros and 14 cents on the US dollar. As the US Dollar is seen as a safe-haven currency, investors lodged their money into the dollar and as the Euro is on the same side of the seesaw as the Dollar Sterling was the overall loser. Foreign and Political affairs have shown over the past decade it’s heavy influence on the currency market so staying in contact with your account manager is more important than ever with the unpredictable world we live in. With our expert knowledge and guidance, we can help through the process of buying currency and giving you peace of mind that you are in the right hands to maximise your currency buying potential.
Data today and the Rest of the Week
A few data releases left this week as we edge nearer to month end. This morning Germany have released Consumer prices which came in as predicted at 9.2%, since the release we have seen a slight drop off for Sterling Euro in the early morning trading. At 10.30am Staying in Germany, 10-year bond auction is to be released. At 7pm in the US FOMC minutes are to be released and at 10.30pm Fed Member Williams speaks. On Thursday, A couple of speeches from members of the BoE throughout the day, they may give an insight to the Bank of England’s interest rate plans for the foreseeable. At 10am in the EU, Core Harmonized Consumer prices is to be released. At 1.30pm in the US, Gross domestic product data is to be posted, this could be a market mover, the figure is expected to remain at last months figure of 2.9%. A quiet end to the week, Overnight in the UK GfK consumer confidence is released. Throughout the day a G20 meeting will be held between Finance ministers and Central Bank Governors. At 7am in Germany, GfK consumer confidence and Gross Domestic Product will be posted.