UK inflation figures were released this morning and showed a fall from 1.9% to 1.7%. This is the second consecutive month that figures have been below the BoE’s target rate of 2% and will help to reaffirm belief that the UK economic recovery process is gathering pace. Whilst this is a positive for the UK, the Pound has fallen away from the highs we witnessed a couple of weeks ago against the EUR, USD and AUD. GBP/EUR rates have slipped back below 1.20 and it will be interesting to see whether today’s data can help push rates back through this level.
Anyone with a GBP/EUR requirement should keep a close eye on Thursday’s UK Retail Sales and Friday’s GDP figures, both of which are likely to be key market movers. If Friday’s GDP figures vary from the 0.7% predicted, then it likely we will see additional volatility on GBP/EUR exchange rates.
GBP/USD levels continue to float around 1.65 on the exchange and despite an improvement in the US economy the USD is still struggling to make a decisive move back towards 1.60. The USD did start to strengthen towards the end of last week, after head of the FED Janet Yellen’s first official press conference since taking her position. She indicated we could see a potential rate hike within 6 months and although this was taken by some with a pinch of salt, it did seem to breathe life back into the USD, as markets reacted positively following the announcement. With positive data expected for the US economy on Wednesday, we could see further USD gains before the end of the trading week.
If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our rates with your current provider, then please feel free to contact me directly at [email protected].