New Hope For The Pound Today

The Pound has had an improved twenty four hours as markets pre-empted positive PMI data this morning – very much an antidote to last week’s shock negative GDP growth. Hopes were high that although the overall GDP figure for the last quarter cast doubt on how well the UK economy was recovering, the individual areas of manufacturing and construction would shine through – perhaps even suggesting that the revised GDP figure will move upwards. At 9.30 am this morning when the PMI data was released Sterling commenced an instant climb. This may be the moment you have been waiting for if you need to exchange Sterling into another currency soon, so speak with your broker or register an enquiry to discuss your requirements.

Pound Sterling – UK Markets

Sterling has some wind in its sails this morning following the build up to, and actual release of the UK PMI figures. With manufacturing PMI coming in at a robust reading of 62.0 above the forecast of 58.1, fears about the terrible GDP result of last week have been a little relieved. With another PMI construction figure due tomorrow, Sterling may well continue to build momentum. In addition, Martin Weale, monetary policy committee member from the Bank of England, has commented that the case is strong for a small rise in interest rates early in the year, so the ‘will they, won’t they’ debate regarding interest rates is continuing.

US Dollar – US Markets

Tensions in Egypt have had a slightly more watered down effect on exchange rates over the past twenty four hours compared to the weekend. The Dollar weakened as investors began to move funds to other safe haven currencies such as the Japanese Yen and Swiss Franc. The Dollar lost out to both the Euro as European inflation data came in high and the Pound in the pre-empting of UK PMI data. US inflation data also revealed that prices for December rose at a record yearly slow of 0.7 percent helping to support the idea that the Federal Reserve will maintain its loose monetary policy.

Euro – European Markets

The Euro uncertainty bought about by the protests in Egypt over the weekend, was overshadowed somewhat in the past twenty four hours by individual European data releases seeing some ground gained back by the single currency. The Euro pulled back from lows as CPI inflation data came in at 2.4 percent which was just above expectations of 2.3 percent. This also fuelled speculation that this week’s European Central Bank rate meeting could see more discussion on how to deal with inflationary pressures.

Other Currencies – Highlights

The Reserve Bank of Australia left interest rates unchanged at 4.75 percent as inflationary discussions were no doubt overshadowed by the economic impact of the floods. Further floods are unfortunately only likely to create more economic damage and weaken the Australian Dollar. For a live quote or to tell us about your foreign exchange requirements, please call us on +44 (0)20 7740 0000.