By Simon Eastman
The pound rallied again on Thursday after a raft of positive UK data in the morning’s trade.
GDP came out as expected with no change to the monthly figure, showing zero growth for our economy, whilst the preliminary quarterly and yearly figures both came in on target at 0.6 percent and 0.9 percent respectively. The main booster for the pound was the better than forecast industrial and manufacturing production figures which both beat expectations significantly, showing the economy is faring better than anticipated. With no further data for traders to go off, the pound rallied across the board making modest gains but yet again stifled by the resistance ceilings we have previously been used to over the last couple of years and again more recently since the Bank of England cut interest rates. With the ever increasing potential for further interest rate cuts from the Bank, those with euros to buy in the coming months might be prudent to look at securing your funds sooner rather than later. Chasing the rates we had last month, could well end up costing you more if rates move down the historic range, which covered five cents in total.
Sterling/Dollar was following suit, until lunchtime when the US released a raft of data, starting off with better than expected initial and continuing jobless claims, showing the US jobs market in a better position than expected. Then the NY State manufacturing index was upbeat, followed by the Philadelphia manufacturing index showing a mixed bag. Nevertheless, this was overshadowed by the US retail sales, which comfortably beat forecasts and gave the greenback a much needed boost, gaining nearly a full cent against the pound at its peak. Industrial production figures which came in low cut the rally short and we saw the pound retrace all the losses ending the day at the week high.
Today is another important day for figures to end the week, with UK retail sales kicking us off early doors, which at the time of reading will already be having an effect on the pound. Following shortly is the European trade balance, whilst this afternoon we cross the pond to some low key Canadian data ahead of US housing data and the key Michigan Consumer sentiment index which has the potential to provide further swings like we saw yesterday.
As another week comes to a close, there is potential for some swings in the rates affecting how far your pound goes. With different contracts available to secure your currency, speak to one of the team today for some friendly guidance on what might be the best options for managing your upcoming currency requirement.