We’ve had another week of trading with relatively thin ranges for Sterling exchange rates as economic news out of the UK has been thin, and the UK economy has remained out of the headlines for the first time in a while as issues elsewhere have dominated the headlines.
Seeing Sterling trade within a cent’s difference between the days highs and lows is currently the norm, although we are witnessing the Pound gradually decline back down to the 52 week lows which in most cases are also 3 to 5 year lows also (or 31 years in the case of the US Dollar).
Moving forward I’m expecting to see the Pound find support at these levels, with those of note being GBP/EUR (1.1456), GBP/USD (1.2777) and GBP/AUD (1.6712).
Those that have been following the currency markets will be aware that we’re currently very close to those 52 week lows, and whether they’re breached or not will offer us an indication of what’s likely to unfold in future.
It’s worth noting that economic data out of the UK hasn’t been disappointing recently, and an example of that was this mornings better than expected GDP Figures for the previous quarter. The expectation was for an increase of 0.6% whereas the figure actually came out at 0.7%. This boosted the Pound’s value briefly but that upward spike then fizzled out which can most likely be put down to profit taking by day traders.
It’s these short term patterns which lead me to believe the Pound will struggle as despite relatively good fundamentals the Pound is still gradually declining back to its lows.
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