Good Morning. The pound rose to its strongest against the dollar in nearly two weeks, extending its rally for a fourth successive day after data on Tuesday showed an upward revision in UK economic growth for the last quarter of 2009. Sterling also rose against the Euro to a 1 month high, as unemployment in the EU was higher than expected. Rates this morning:
The pound has rallied since late last week, clawing back after being knocked more than 6 percent lower against the dollar in the first quarter, its biggest slide since late 2008. Sterling hit a one-month high against the euro on Wednesday as traders covered extreme short positions in the UK currency, which was also supported by a spate of positive economic data from the previous day.
Bets the pound will depreciate further were driven by concerns about the UK election expected in May. Many in the market expect the position unwinding will boost sterling in the near term, but analysts remained jittery that a general election expected in May might result in a hung parliament where no one party holds a clear majority.
This would potentially make it difficult to pass tough initiatives to decrease Britain's debts, which would be negative for the pound. Those that need Euro's later in the year that are worries about the pound falling should consider locking in a rate with a Forward contract.
The unemployment rate across the 16-nation eurozone hit 10% in February, the first time it has reached double figures since the euro was introduced. The jobless figures showed large variations between nations in the eurozone. The figures were worse than expected, and so the Euro weakened making it cheaper to purchase, and the net effect is the highest pound to euro rates in over a month.
Today we have the data below. UK and EU markets are closed for the Easter holidays, however other markets are open, and so rates will continue to fluctuate. If you wish to take advantage of rates when FCG are closed, then you can use our online platform allowing you to purchase currency whenever you need to, 24 hours a day 7 days a week.
View a demo. And to register for an online trading account, click here.
Have a great weekend.
Ger – Retail Sales
EU – Purchasing Managers Index
US – Jobless Claims
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