Sterling Struggling Early On

Sterling faces a tough week in the markets as more key data is set to be released. After recent gains against the Euro and Dollar, those who sold the local currency may be sitting pretty whilst those who looked to wait it out for further gains may have missed the boat.

Pound Sterling – UK Markets

The GBP/EUR rate at GMT 10.50 was 1.1920 and the GBP/USD rate stood at 1.4979. The Pound takes the spotlight today and for the majority of the week judging by the data that is set to be released. Initially, today at 9.30 we saw Q1 GDP figures. As widely anticipated with weak retail sales and industrial production figures GDP has remained static at 0.3% we have seen Sterling weaken slightly off the back of this news. Furthermore, consumer confidence figures are set to be released and this will be the first review after what was a tough but positive emergency budget. Investors will be keeping a close eye on Sterling to see how it reacts to the news and those with a Sterling transaction would do well to speak with their broker.

US Dollar – US Markets

With the Dollar wobbling throughout the duration of last week, positive data towards the end of the week has seen the Dollar index, which measures the currency against a basket of six others rise to 83.959 from 83.824 on the previous session..

Euro – European Markets

With more news set to be released in the US throughout the duration of the rest of the week, the Dollar will look towards positive data to help boost the local currency The EUR/USD rate at GMT 10.10 was 1.2565. In what was a good week for the Euro, it appears the single currency finally bowed down to increasing pressure from the Dollar. With upcoming bank ‘stress tests’ still a major talking point on the continent, a quiet day on Friday took the steam out of the single currencies rally. The major questions being asked at the moment are focused purely on the tests. Investors are keen to determine how they will be carried out and what will happen to a bank should it fail the test. Looking back historically when the Euro was in the midst of its crisis, major players were suggesting that the currency would soon be on par with the Dollar and parity with Sterling was expected by some. However, we have seen a bounce back and positive figures coming out of Germany have been the key driving force behind the Euro’s resurgence. Thursday’s ZEW (consumer confidence survey) will help to get a clearer picture of the mood and this resilience could prove to be a key factor in investor confidence.

Other Currencies – Highlights

The Australian Dollar fell back slightly amongst concerns that recent positive sentiment and data coming out of the country may be occurring to rapidly for the economy. With the global recovery beginning to slow, investors are starting to show caution on the pace of growth in Australia. Close neighbour New Zealand also saw its currency fall back on the back of news that US retail sales are likely to show a decline through June. On the flip side, China reported record export figures for June which caused Asian currencies to rally. The Asian Dollar Index tracks the 10 most traded currencies in the region and positive interest rate levels have been the driving force behind recent improvements. For a live quote or to tell us about your foreign exchange requirements, please call us on +44 (0)20 7740 0000.