Daily Archives: April 10, 2012

Will this sterling strength remain?

The pound is enjoying an excellent run of form lately, mainly because the prospect of a UK recession seems to have lessened further since last week. Whilst Industrial Production data showed a worrying fall for February, it is more than likely that the PMI surveys (which have all been positive) for Q1 indicate there is no technical recession. The NIESR (National Institue of Economic & Social Research) estimate last week was a meagre 0.1% growth, but again this further rules out the prospect of a UK recession.

The next big event for the pound in my diary is the 25th April when we find out the UK GDP estimate for Q1. Until this date I imagine confidence will remain for sterling. If selling a foreign currency to buy the pound I would be weary of holding out for major improvements. The pound really seems to have found some solid support at current levels.

With Eurozone instability back in the picture it looks like there will continue to be excellent buying opportunities for the Rand, Aussie and Kiwi. These currencies will weaken when there is global instability as they are used by investors in ‘carry trading’. A key release this week is Chinese GDP which is released in the early hours on Friday morning at 03.00 UK time. If looking at any AUD, NZD, ZAR, USD or even CAD trades this week be aware of this release, although depending on how the market reacts we could well see the Pound and Euro suffer or benefit as investors take new positions in light of any new outlook…

Investors are watching closely what is happening in China and with serious talk now of a slowdown, if the estimate comes in worse than expected expect to see movement as described above. I would strongly recommend a Stop / Loss or Limit order to protect your exchange rate. If you are unsure about your options please feel free to ask me directly on jmw@currencies.co.uk I will aim to respond immediately in usual UK business hours. If you are overseas do not fear, we can deal with clients all over the world. Our 24 hour market monitoring system means we can watch your rate 24/7. . I (we) will respond personally as soon as we are able to…

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