Sterling Remains Buoyant

By Simon Eastman

Yesterday we had a lack of data of note, with a few central bank member speeches scattered around the US jobless claims data.

The pound spent most of the morning trading flat against its major pairs, as markets awaited the data released after lunchtime in the US. With the jobless claims reduced to 218,000 for January, from 227,000 last month, and better than the forecasted 220,000 claims, the dollar gained half a percent against the pound and euro, but these gains retracted as the afternoon went on and were almost all wiped out by close of the trading day. Sterling euro remained up at the peak levels we have seen a few times over the past 15 months, giving those with sterling in hand, buying in Europe, some great buying opportunities to secure their currency for any upcoming purchase. For those with a completion in the coming months, you might want to consider locking in your exchange rate today, with a small down payment, on a forward contract; speak to the team today to find out more.

Sterling dollar has been rangebound over the past few months within a 2-cent range, with the pounds buoyancy pushing rates up to the top end of that range for the past couple of weeks. We have seen the dollar benefit from data recently and comments over interest rates as the Fed have commented rates will not be going down anytime soon, strengthening the greenback, and pushing cable down towards the lower end of the range earlier this week. With the Bank of England saying much the same, while the European Central Bank have talked of rate cuts, the euro is the currency seemingly losing out with sterling winning favour with traders, as any dollar strength has not lasted long.

The week rounds off today with some key German data in the form of inflation, plus a speech by German Buba (Bundesbank) President, Jachim Nagel mid-morning. With this the EU’s major economic driver, we could see some euro movement off the back of the data and any subsequent comments from Nagel, so buyers beware and stay in contact with your broker.

After lunch we head stateside, but north of the border as the Canadian unemployment figure is released alongside average earnings, with both figures expected to improve from last month. As the EU trading week closes off, the US Fed monetary policy report is released which could lead to some end of week volatility.

For further insight and some friendly guidance, contact one of the team today.