It has been an interesting start to April for those selling Sterling, who have seen their position climb consistently over the last couple of weeks but have recently had a number of alarm bells that may well lead them to consider their situation.
The table here displays the movements for a number of GBP currency pairs in the last 30 days and the resulting difference when converting £200,000.
|Currency Pair||% Change||Difference on £200,000|
Wednesday’s worrying manufacturing data was further compounded by yesterday’s shaky Services PMI release, posting growth levels at a similar rate to those shown just after the Brexit vote as a result of the surprisingly bad weather sapping consumer spending.
Interestingly new car registrations were also down by 15.7% year on year for the month of March which can often signal a slowdown in consumer confidence.
Sterling’s gains were instantly brought into doubt, dropping by 0.15% against the Euro and 0.45% against the US Dollar during yesterday morning's session. That’s a difference of $1,600 on a £200,000 transfer and just highlights how important it can be to organise a trade around a key economic release.
However, from a sterling holders’ point of view, it was promising to see how well positioned the Pound seems to be in the markets at present. Where last year sterling’s value hinged on key economic data hopefully outweighing all the uncertainties of Brexit. Now we are seeing a far more resilient Pound that seems to be enjoying the build up to the next round of negotiations with Europe.
Yesterday was a testament to this as despite the heavy slowdown in growth within the services sector, which accounts for around 80% of the UK economy, Sterling stabilised and is still sitting at near multi month highs against the Euro.
This is further proof the markets still have complete faith that the Bank of England will raise rates as previously mentioned at their monetary policy meeting in May which suggests to me there could be even more support to Sterling’s value over the next weeks and months ahead as the going gets tough during Brexit talks.
BoE Governor Mark Carney is due to speak at 15:15 this afternoon. It will be interesting to see how the markets react to his comments in light of this week’s testing points. Given data is fairly light in the first half of next week, it may pay to organise a transfer around his speech to capitalise on a shift in your favour.
For more information on how future data releases could affect your currency requirement, call our team of currency brokers on 01494 725 353.
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