Will the UK avoid recession? The BCC certainly thinks we will…..could the pound get stronger? (Michael Vaughan)

GBPEUR Rejected by 1.17 Price Level Again

Today has been a slightly strange day as the pound has lost ground against the majority of currencies, and in some cases quite heavily losing over 1% against the New Zealand Dollar, 0.9% against the Australian Dollar, 0.7% versus the US dollar and 0.6% against the Euro. This comes following a much needed Easter break, and although the UK is showing little sign of spring like conditions, could we be seeing the beginnings of an economic recovery to brighten up your day? Certainly the British Chambers of Commerce thinks so. In a report released this morning the BCC indicated that a strong performance by Britain’s service industries during the first three months of the year has kept the economy growing. The BCC’s survey, which included more than 7,000 firms, found that conditions for both the services and manufacturing sectors were improving, but the services sector saw some of the biggest improvements, with strong domestic sales and exports, and with Services accounting for about three-quarters of the UK economy this is certainly positive news.

Following this news from the BCC the Euro zone released their latest unemployment figures showing a record high of 12% and bringing total unemployment to over 19 million. The highest jobless rates were 26.4% in Greece, although this figure was from December, and 26.3% in Spain. This you would think would all lead to a good, positive day for the pound, but we have infact seen the exact opposite. I for one cannot see an exact explanation for the pounds losses however to me this really empasises what a volatile market place this currently is. I do feel this is a s light blip for the pound and would expect levels against the Euro in particular to remain range bound between 1.17-19, I do also feel the overall benefactor of the ongoing Cyprus debacle will be the US dollar as it gains from its historical ‘safe haven’ tag. For this reason look for a move back to 1.50 for GBP/USD and EUR/USD to move towards 1.27.

Should you have any upcoming money transfers to arrange and you have found this blog useful then why not contact us to see what we can do for you? The purpose of the site is to give you independent market views to help you make an informed decision with your currency exchange. By giving yourself as much information as possible it can put you in a far stronger position when attempting to maximise your currency exchange, allowing you to limit your exposure to adverse market movement. Should you wish to find out more about the specialist currency service we provide, whether you are a private or corporate client, then we can help. Please get in touch either on 01494 725353 or by emailing me with a brief description of your individual requirement and I will happily contact you and run though your options. You can reach me direct at [email protected]