By Grace Smyth
At the start of a new month the pound remains to be one of the best performing currencies. Particularly against the Euro which closed out yesterday’s trading day close to this years high. The single currency underperformed as August’s services PMI data failed to reach expectations, which will likely contribute towards the European central bank’s next moves. While the UK also posted lower services PMI data yesterday the drop wasn’t as bad as markets had anticipated so still giving sterling an edge over the euro.
For those looking to purchase euros from sterling, now could well be a preferential time to do just that. This week is fairly muted in terms of economic data, so exchanges rates are likely to remain range bound ahead of the bigger events due later in the month. UK inflation and the Bank of England’s next interest rate decision on the 20th and 21st have the potential to turn the pound’s current strong run on its head so it may be wise to consider securing your funds in advance, in the event the results do not play to the pound’s favour.
You could also consider our limit order option, in where you can secure your currency requirement at a rate of exchange higher than what is currently available. Should the market move up to a level where the rate you want to achieve can be secured, your order will be fulfilled. A great tool in an unpredictable market.
The USD had also strengthened significantly yesterday which gave good opportunities to sell US Dollars. It would appear the US economy is in better shape than the eurozone and despite negative data releases from the US earlier in the week, USD seems to have reversed its position. Perhaps higher treasury yields gave it a boost too.
On to today’s trading, first thing this morning at 09:00am the Eurozone release July’s retail sales figures. A release worth noting as it provides a good indication of consumer spending. It’s expected to post a drop to -0.2 percent from -0.3 month on month and another retraction for the year on year figure too. Later in the afternoon’s trading the US post services PMI which is set to retract from 52.7 to 52.6. The employment index and prices paid index are also due to be released this afternoon. Again worth noting as these releases are closely watched by investors as they provide insight into the state of the labour market and inflation. At 14:00 the Bank of Canada release it’s latest interest rate decision and statement and a speech by Reserve bank of Australia’s Governor Lowe speaks at 15:10.
With markets still very much pushing against each other to win the race of economic recovery, there’s everything to play for and investors are keeping a sharp eye on it all. Don’t be caught out by surprise movements and stay in touch with your currency consultant and the friendly team here at A Place in the Sun Currency to maximise your savings potential and currency return.