Sterling bounces on the back on mixed data

Hot weather in the UK during April saw shoppers dip into their wallets and high street sales were boosted by extra bank holidays. However, Sterling has seen any gains made yesterday wiped off this morning on poor housing stats. German exports surged in March with trade surplus reaching a six month high but the Euro is still being blighted by the PIGS (Portugal, Ireland, Greece and Spain). To find out how the mixed data will effect your transfer speak to your broker today.

Pound Sterling – UK Markets

Sterling had a positive morning yesterday with UK retail sales up 5.2 percent on the annualised figure; a stark contrast to March’s data. The British Retail Consortium has dampened positive feeling by highlighting that weak spending is being challenged by retailers who are fighting hard for customers to spend money. UK house prices were down 1.4 percent in April according to a Halifax survey, a sentiment which is supported by the Royal Institute of Chartered Surveyors (RICS).

US Dollar – US Markets

The Pound's retreat from one-year highs against the US Dollar at 1.6745 last week extended yesterday to 3-week lows at 1.6270. First quarter US house prices fell by 3 percent and have been forecast to drop by as much as 9 percent in 2011 by some analysts. Clients looking to trade Dollars are advised to speak to their brokers to ensure they understand the options available to protect themselves against adverse movements in the rates.

Euro – European Markets

Greece is back under the spotlight following the EU’s admission that Athens will not be able to meet the terms of its 110billion Euro bailout. This on the back of the news Standard and Poors downgraded Greek debt from BB to B. Portugal is sharing Greece’s gloomy outlook and is forecast to remain in recession for the remainder of the year. Eyes are also on Ireland whose possible default from the bailout package would have far reaching consequences including Britain. The UK is liable for 5 percent of any cash given by the International Monetary Fund and 13.5 percent of money given through the EU’s bailout fund so although we have seen Sterling gain against the Euro on the back of the data from the PIG nations, any gains will be kept on a tight leash.

Other Currencies – Highlights

China's trade surplus in April was nearly four times bigger than expected, with exports far exceeding imports. This news comes during US-China talks and many in the US, especially exporters, argue that China's currency is undervalued, making Chinese goods highly competitive in world markets.