We'll take stock of this weeks currency movements in a moment, and where things may head into next week. First let's take a quick look at what happened in the currency markets yesterday:
Pound takes a hit on Retail Sales
Sterling plummeted yesterday morning after the 09:30am data showed UK retail sales unexpectedly fell, raising doubts about economic recovery. Retail sales volumes in May were 0.6% lower than in April and 1.6% lower than in the same month a year ago, and we were only expected a yearly fall of 0.1%. As the figures from the office for National Statistics were much worse than expected, we quickly saw the pound fall. The credit crunch-driven nature of the slowdown so far appears to have primarily hit spending off the High Street.
However, as we forecast, the fall was fairly short lived, and the pound regained much of it's losses throughout the day. At one point Euro rates were as low as 1.1620, however things have improved. At the time of writing Sterling rates are as follows:
- GBP/EUR 1.1746
- GBP/USD 1.6379
- GBP/NZD 2.5585
- GBP/AUD 2.0321
- GBP/CAD 1.8498
- GBP/CHF 1.7765
- GBP/ZAR 13.3037
The weeks trading
The pound had surged sharply in recent weeks along with some other currencies on optimism over the global growth outlook. But investors are reassessing such views as economic data have been mixed. So, at the start of the week rates continued to climb to 7 month highs against the Euro. The profit taking on Wednesday, followed by the poor retail sales data pushed the pound lower, but the general feeling of recovery remains, which is why we've seen rates climb back close to the highs we saw earlier in the week.
Data Releases, and other influencing factors for exchange rates
As markets are so volatile at the moment, even small economic data releases that are slightly different than forecast are having big impacts on exchange rates. This is why I post the daily data releases here, in anticipation of market movements.
When there is not much data being released, such as today and most of next week, then it is mainly currency speculators and other events such as political data that drive the markets. So, even if there is no data like today, political data and other events such as the unrest in Iran that can cause investors to move currencies to perceived safer havens such as the US Dollar.
Your currency requirements
If you are reading this, then it's a fair bet that you have some vested interest in exchange rate movements. Perhaps you are buying a property abroad, or need to make an international transfer from Sterling to antoher currency, or perhaps even moving a foreign currency back to Sterling.
This is where we can help. This blog gives market updates based on my knowledge of the markets as a trader at the Foremost Currency Group, but our main business is obtaining commercial exchange rates for our private clients. Our rates can be up to 5% better than can be achieved with the high street banks. Why not open an account to find out how much you could save. It's free, it doesn't obligate you, and you can even trade online using or online trading platform that's available 24 hours a day, 7 days a week.
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