By Simon Eastman
Sterling versus the single currency has shown gains for almost a week now, giving some of the best rates of exchange seen this year, if not longer.
Both currencies took a hit last week as the energy crisis grabbed the headlines, with the UK still seeing massive queues at forecourts and rising energy costs at home. But the EU is in the same boat and with the British Army stepping in to assist with distributing fuel and general economic factors looking better here in the UK, the pound is winning the battle it seems as we hit some of best rates of exchange since February 2020.
Buyers must beware though, as we have seen the pound make gains across the board, we should cast our minds back to the other times we have seen this and recall how short lived they were. Big gains lead to profit taking, so we’ll need to watch this space.
Aiding Sterling is some poor EU data, with the release of negative German industrial production figures and rumours the European Central Bank are considering a new QE program to limit the impact of withdrawing the pandemic measures they put in place, set to end next year.
As mentioned the Pound’s gains should not be seen as a given of times to come, based on previous experience, so those with sterling exchanges to make, may be prudent to speak to one of the team at A Place in the Sun Currency today for some friendly guidance on any upcoming exchange requirements.
We have a few key releases today to help sway things either way, with German trade balance early doors, the Bank of England‘s quarterly bulletin at midday, ECB President Lagarde making a speech just after 1pm and the US non-farm payrolls at 1.30pm alongside a raft of other US releases like unemployment and average earnings.
For anyone with a ‘Loonie’ requirement, Canada also release employment data at lunch, with the key data mentions signing off with ECB member Panetta, making a speech at 2pm.
All in all, a busy end to what’s been a busy week on the markets, so make sure to not get caught out and speak to one of the team at your earliest convenience.