The Pound Spikes Following Poitive UK Retail Sales Figures (Matthew Vassallo)

The Pound received a further boost this morning, following better than expected UK Retail Sales figures. The figure released of 1.1% was comfortably better than the 0.6% predicted and will once again reaffirm investors belief that the UK economy is on the road to recovery. GBP/EUR rates spiked back through 1.17 and based on the current market information I wouldn’t be surprised to see a move up towards 1.18 over the coming days. The only counter argument to this is that if history has taught us anything, it is that when the Pound seems to be on the rise the Bank of England (BoE) will usually step in and say something to reverse the trend.

GBP has performed well against both the EUR and USD this week. The trend gained momentum on Wednesday following the release of the Bank of England minutes from their latest policy meeting. It was confirmed that all 9 members voted against further Quantitative Easing at this time, with a similarly emphatic 8-1 vote in favour of Mark Carney’s Forward Guidance scheme. These bullish statements along with the release of UK unemployment figures, which showed a small fall, boosted market sentiment amongst investors. I do feel there is scope for Sterling to move higher, particularly against the EUR but whilst concerns remain over our trade deficit, I do not believe we will see rates move back up to 1.20.

In other news GBP/AUD rates were pushed back above 1.70 yesterday as the Pound continued to make gains across the board. It wasn’t long ago that the AUD reached an all-time high against GBP of 1.4439 and at that time there was talk of rates continuing down towards 1.30. However, since then we have had a major shift in market sentiment and whilst the UK economy has improved, the Reserve Bank of Australia has cut its base interest rate twice. The most recent cut came last week when they decided to drop it from 2.75% to 2.5%. This was due in part to a concern that the AUD was becoming too expensive to support their affluent export industry and secondly a slowdown in China’s economic growth and ultimately their demand for Australia’s vast supplies of raw materials.

If you do have an upcoming GBP/EUR currency transfer to make and would like a comparable rate of exchange, or require any market analysis around the transfer then please feel free to contact me directly at [email protected] Alternatively you can call one of our experienced brokers today on 0044 1494 787 478.