By Luke Dyson
Following on from last week’s trading, we have seen Sterling make some solid progress, now pushing up close to the top of its recent two cent trading range, which it has been trapped in for the last couple of weeks.
This sudden surge of market strength for the Pound has been driven by a stronger than expected UK GDP figure last week. UK growth came in at 1.2%, ahead of the predicted figure of 1%.
On the subject of economic growth, we also had the EU’s GDP figure released, which saw no change, with a figure of 1.4% coming in, which is what had been expected. This meant status quo for the Euro, allowing the Pound to take advantage of its own unexpectedly stronger figure to push back against the single currency.
We also saw towards the end of last week US President Trump and Russian President Putin meet in Alaska to discuss the current situation in Ukraine. The meeting seems to have been a positive one, but as of right now, there is still no clear agreement or end in sight to the conflict – with both Russia and Ukraine not willing to budge or make concessions on where a potential new border lies.
This situation is a key market mover, with global markets very sensitive to ongoing conflicts. Wars invariably bring uncertainty, which means a flight to safe haven assets, which for those of you buying a property in Euros, has meant a weakening Pound and strengthening Euro. Hence the recent pressure on GBPEUR exchange rates and therefore increased costs.
Moving onto the week ahead we have a busy one UK data-wise – we have UK consumer price index inflation out at 7:00am on Wednesday, followed by S&P global PMI at 9:30am Thursday, followed by UK retail sales at 7:00am Friday.
All of these data releases hold significant power to move the market drastically depending on the outcome/results.
If you have an up and coming currency requirement, especially if you are buying Euros, please take advantage of the current market highs, as these could be very short lived given where the price is in the market, but also the amount of substantial data out this week.