Latest figures have shown that retail sales have grown at their fastest pace in three years. The British Retail Consortium said like-for-like sales were up 2.7% from the previous year the best since December 2009. This is some welcome news for the UK economy and suggests we are on the right move to avoiding the ‘triple dip’ recession. Should figures continue to show positivity this could be some much needed respite for the pound which has had a torrid time since the start of the year falling over 8% against the single currency, 7.75% against the greenback and 7% against the Australian dollar.
Should you have an exchange requirement involving sterling then this mornings retail sales data is certainly a welcome boost but I would err on the side of caution. Today is relatively quiet day but heading into Wednesday and Thursday there is plenty of data to spoil the party. This starts with a speech from Bank of England Governor Mervyn King at 09:45 GMT tomorrow. King, as with many of his Bank of England colleagues, has been very open in recent weeks and months about talking down the value of sterling. The theory behind this is the weaker the pound the better the UK’s exports and hence an injection of funds from overseas to the UK. Of course if this works in its simplest form then great and this could help the UK avoid recession and it is a stance I believe the bank will continue to take, certainly during the month of March, something that is likely to keep the pounds value in check.
Following Kings speech tomorrow, Thursday will see the UK and Eurozone releasing their respective interest rate decisions at 12.00 and 12:45. I would expect rates to remain on hold but watch out for any talk from the Bank of England about Quantitative Easing (QE). It could be a close call as to whether they extend as King himself voted for more QE in February but was out voted by his fellow monetary policy committee members. Should we see QE extended then expect sterling weakness. Possibly one to avoid.
Anyone looking at GBP/EUR should also watch out for the Eurozone release. Again expect no move from Mario Draghi but watch out for his post decision press conference held at 13:30 for insight as to the future policy within Europe.
Looking toward the Australian dollar interest rates have been kept on hold by the Reserve Bank overnight but keep an eye on GDP data at 00:30 tomorrow morning. Expected to show a slight increase month on month from 0.5% to 0.6% – those buying Australian dollars are likely to get little benefit in the short term, unless these figures are worse than expected.
With so much data released this week it is important to keep regularly updated with market movements and trends as the market is becoming increasingly volatile. To find out more about the currency service we provide contact the office on 01494 725353 or email me with a brief description of your currency requirement and timings and I will be happy to track the market on your behalf and to help you decide the best course of action to try and maximise your exchange. I am also very confident I can better any price you are offered by any other provider. Please email Mike at [email protected] for more information.