Thursday 18th August 2011
Good morning. Yesterday morning Sterling fell after poor unemployment data, however in the afternoon the Pound surged back against other currencies, creating close to the best exchange rates for several months. At 08:30am this morning rates are as follows:
• GBP/EUR 1.1462
• GBP/USD 1.6515
• GBP/AUD 1.5755
• GBP/NZD 1.9849
• GBP/CHF 1.3136
• GBP/CAD 1.6230
• GBP/ZAR 11.758
• GBP/JPY 126.44
• GBP/DKK 8.5391
• GBP/NOK 8.9267
• EUR/USD 1.4402
Yesterday the Bank of England released the latest minutes to the recent decision to hold interest rates. They voted 9-0 to keep rates on hold, surprising many in the markets that thought 2 would vote for a hike in rates.
It didn’t affect exchange rates too much, as we already know that rates in the UK are going to be left on hold for at least a year. The minutes also showed the policy-setting committee considered a new round of stimulus given a worsening economic outlook, acknowledging that problems in the euro zone were the biggest threat to the UK economy.
Data surprised yesterday, when the number of Britons claiming unemployment benefit jumped by more than expected last month, and the rate hit the highest level since February 2010. Immediately after the results, Sterling fell around 0.5% against other currencies.
Sterling surges in the afternoon
Despite the dovish BoE minutes and the higher than expected unemployment figures, Sterling surged in the afternoon, making gains against the Euro and US Dollar. After initial selling of the Pound after the poor data, traders were forced to cover these positions leading to a short squeeze on Sterling, helping push rates up nearly a cent against the Euro.
Those that need to buy Euros should consider taking advantage of these rates, as several times in the last month we have reached these levels, only for rates to quickly drop back away. With uncertainly surrounding the UK economy rates could easily drop back away.
Conversely, if we get further poor news from the EU, we could see the Euro weaken and rates climb, so it’s certainly very volatile at the moment. Regardless which currency you need to buy or sell, contact us today to discuss the tools we have to help you achieve the best possible exchange rate.
Today’s UK data is Retail Sales, which are a barometer of consumer confidence. From the USA we have unemployment figures, Jobless Claims and Home Sales. There are no major releases from the EU today.
If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.