By Luke Dyson
For the last couple of weeks sterling has been very stagnant across the board, with very minimal movement in either direction, now making its current daily range very tight. This will be more than likely the case until a stimulus of some sort political or economic event pushes the market in either direction.
It is believed and has been stated by ING Bank that sterling could experience a major setback in the next few weeks come early May, as the Bank of England could surprise investors by keeping interest rates on hold. If this was the case, investors would be thrown off as it is currently expected a 25- 50 basis point hike is in order.
We have seen some strong movement in early March, which was a shock given the UK’s current account deficit. However this was spurred on by double digit inflation figure, resulting in more Pound-positive interest rate hikes from the Bank of England to combat this.
At present Sterling is holding very close to this years high’s to date against the Euro. However the pair has tried to break through the top of the range four times previously but been unsuccessful: clearly a strong resistance level within the market.
With where the market is placed at present this could prove an excellent buying opportunity, given where the market has been the year so far. If you have an up-and-coming requirement, consider taking advantage of this as the market is likely to aggressively jump in one direction or the other, given how tight its current daily range has become.
We could expect some movement later on today with two speeches being presented by Bank of England Governor Andrew bailey at 13:00 but also 19:15.