This week has been a particularly quiet one in the way of major data releases other than those from the UK and as such it has been altogether a much quieter one in the way of market movements. Until Wednesday much of the market in particular the majors traded sideways, and if anything it was the pound that slowly lost ground arguably due to the almost non-stop raft of positive releases recently. Wednesday saw US GDP figures released and showed a much larger drop than anticipated down from a predicted -1.7% to 2.9% (last year’s reading was 2.6%). This figure in real term equates to a $15 billion loss in the quarter, and so little surprise the markets reacted quickly and GBP pushed USD back close again to a 5 year high. Against the Euro for the first part of the week the pound saw points slipping, again a likely correction from its recent rapid gains. However, yesterday morning we saw BoE Governor Mark Carney speak who talked primarily about mortgage loans in the UK. Indicating there would be a tighter approach to mortgage lending in the UK the markets took this as a positive, perhaps taking the view that it would offer more financial stability in the UK long term. Once again we saw the pound again gain ground, however only that that was lost whilst still not gaining enough momentum to push through the recent 2.5 year high we have seen.
Today continues the “Sterling show” as it has been all week as we see the UK release GDP figures in the morning, which result dependant could well see rates move quickly. An interesting observation would be that in recent weeks we have seen the pound touch 2.5 year highs against EUR and 5 year highs against USD but has not pushed through these levels on either front despite wave after wave of good news. So some concern should be held over the current levels – what or how much is required to break these levels? With it so close how quickly will it drop if the data release is negative? With GBP enjoying these dizzying heights those of you with EUR or USD requirements should be warned that a given the recent run any bad news from the UK could see these fantastic rates quickly fade. So stay in close contact with your CI broker for some friendly and professional guidance on how to get the best out of your transfer. We can alert you when a specific rate is achieved, and generally help you stay well informed and well ahead of the market.