UK Economy Continues To Improve – GBP Strength

It was confirmed yesterday that UK unemployment had fallen by more than expected and is now at 7.1% just marginally above the target set out by the Bank of England for considering increasing interest rates and as a result we saw Sterling exchange rates push up significantly yesterday producing fresh highs against the EUR, USD and several others of the major currencies. While many analysts believe it is unlikely the BoE will increase interest rates in the coming months, due to the forward guidance provided by Mark Carney the BoE will be under scrutiny now and I would not be surprised to hear Mr Carney come out soon and announce that falling unemployment is no guarantee of a hike in interest rates. However, regardless of this the markets have a level of expectation now that interest rates will increase shortly and so Sterling is well supported and is presenting those clients looking to buy EUR, USD, AUD, CAD, ZAR and NZD with some excellent opportunities.

Yesterday in Canada the Bank of Canada kept interest rates on hold as expected, however what was a surprise was the fact that they announced their inflation had fallen significantly and so they may have to consider cutting interest rates soon and as a result the CAD weakened significantly with Sterling gaining around 3 cents in the last 24 hours meaning those clients looking to buy CAD have some excellent opportunities this morning. So, if you need to buy Canadian Dollars and would like to discuss the options available to you please call us today. You can call straight through to our trading floor for free on 0800 328 5884 or if calling from abroad 0044 1494 725353 alternatively email me directly on trh@currencies.co.uk