By Simon Eastman
The pound traded within a tight 25 pip range on GBPEUR and half cent range on GBPUSD yesterday, due to the lack of data for the UK.
Instead, we saw EU harmonised inflation data released in the morning, coming out better than forecast across the board. This gave the euro an initial quarter point boost against sterling and a half cent rally against the USD ahead of the US open.
Following lunchtime, the US markets opened with a raft of data releases, including jobs data and GDP. The jobs data both showed an improvement over the expectations with less people out of work and the continuing jobless claimants down by nearly 40,000 on the expected figure of 1.7 million people. The dollars rally was muted though due to a mix in GDP, with the preliminary Q4 figure showing an increase over forecast of 3.5 percent, at 3.9 percent, but the more structed annualised figure, showing growth in a specific time, dropped from forecasts to 2.7 percent, from 2.9 percent. With this being seen as the more key stat, the dollar struggled to take much benefit from the other figures. Cruse oil stocks also showed a steep decline from forecasted figures. Regardless, the greenback showed its authority finishing the day stronger than the open against both the pound and euro.
As we close on a week which showed some better exchange rates for those holding sterling earlier in the week, we again have little for traders to go off today for direction. The Good for Knowledge (GfK) consumer sentiment survey has already been released overnight, showing a severe lack of confidence surrounding the UK economy, much to no one’s surprise.
We have German GDP readings out early doors, but its then radio silence until the US markets opens after lunch. From there we have various readings surrounding consumer spending, personal income, and consumer sentiment. New homes sales and some Fed central banker speeches to wind up the week. Fairly US heavy to end and we have seen how sentiment has leant towards the USD of late.
Anyone with a currency requirement coming up in the near to medium term may well be prudent to speak to one of the team today to discuss the options available to you to secure funds on a Spot or Forward contract, or via a Stop Loss or Limit market order.