Sterling could weaken by the GDP figures this Friday. Good buying levels still occur against the USD, CAD and southern hemisphere currencies.
Sterling exchange rates have weakened slightly this morning from yesterday’s close. Yesterday was very light on the data front but this morning Germany has started the first of this week’s major release with their PMI for the manufacturing and services sector. The levels came out above expectation and this had led to some short term Euro strength. Then Germany came out with their ZEW survey which shows what economic sentiment is within the strongest economy in the Euro zone. These levels came out particularly poor but that has not stopped the Euro strengthening.
In the UK we had mortgage approvals released this morning which showed a slight improvement. This will be positive moving forward and the biggest data release of the week will be out this Friday with the revised Q2 GDP figures for the UK. This can potentially be a very big market mover, GDP is a good measure of economic growth and is closely watched by investors. The UK is currently facing high levels of inflation at 4.4% year on year which is considerably above the BoE target at 2% plus jobless claims are high.
We could be facing stagflation where inflation is high and economic growth rate is low. The GDP figure on Friday may indicate slow growth and subsequently we may see sterling suffer as a result.
Recently we have seen the pound perform fairly well against a host of currencies due to investors seeking a safer investment at a time of heightened concern about euro zone debt problems and weakening growth in the United States. The risk of intervention by central banks have deterred them from buying Swiss francs and Yen hence turning to sterling.
With the recent highs that have occurred now may be a good time to purchase your currency especially against the likes of the USD, CAD, NZD, AUD & ZAR where the pound has been spiking. Please feel free to call me 01494 787474 or email me at bma@currencies.co.uk with your contact details and I will be happy to have a chat with you to explain how you can save on your currency exchange with us here.
