Monday, 18 April 2016

Monday, 18 April 2016

Sterling gains ground

Sterling had a good week and strengthened quite considerably by 2 cents against the euro. In monetary terms on an exchange of £250,000 you would return €315,000 as oppose to €310,000.

President Obama is set to speak this week and will be backing Cameron’s pro EU stance. The move has angered the leave campaigners as it is believed Obama could sway undecided voters on the convoluted decision.

What happened to the rates last week?
Monday saw the pound gain 1% against both USD and EUR. The move was caused by a positive rise in the European stock market which resulted in more risk appetite for investors in the market, in turn boosting the value of the pound.

Positive UK inflation figures on Tuesday saw the pound continue on its gain against the euro and rose to a high of €1.2558. This was only a momentary increase as continued fears over the Brexit had a bearish effect on the pound and bought it to a low of €1.2488 ending the day just above €1.25.

Positive news for China on Wednesday as it bore witness to an 18.7% increase in the Chinese markets which was the largest increase in over 12 months. Relating back to Monday, this again boosted investors’ opinion on riskier assets as we saw the pound gain almost a cent against the euro.

BOE released on Thursday the monetary policy committees vote regarding the interest rate decision which as forecast, the vote to remain at 0.5% was decided unanimously. Many analysts have now pushed back predictions to an interest rate increase to the final quarter of 2017.

It was a fairly quite end to last week as Friday saw rates remain range bound between €1.2559 and closed near €1.2540 unfortunately, although sterling performed well last week it is remaining the worst achieving group-of-ten currency against USD this year.

World bank President Jim Yong Kim cautioned “the economy is not going to do well with more uncertainty” as investors normally move away from currencies of countries with a more ambivalent political outlook.

Will the pound continue to strengthen?
A closing point to note. Although sterling has strengthened slightly over the course of the last few days, the general trend has been downwards. However recent data from China has boosted global markets particularly the pound and European stocks so we could well see sterling recover.

GBP/EUR exchange rate graph

Get in touch

There are a number of different contracts available to you and each trade is specifically tailored to each person’s individual requirement. If you are looking to buy or sell any major currency, want to achieve the best rate of exchange and benefit from expert brokers with extensive market knowledge please contact our dedicated broker Adam Bobroff and mention Allez-Français ………..
Filed Under: , ,


Post a comment