Tuesday, 29 March 2011

Sterling lower on Interest Rates/GDP figures today

29th March 2011 Good morning. Sterling is lower this morning as we'll see in a moment. Markets are awaiting UK GDP figures at 09:30am which may well cause a significant change in Sterling exchange rates. At 08:30am this morning rates are as follows:

  • GBP/EUR 1.1329

  • GBP/USD 1.6015

  • GBP/AUD 1.5612

  • GBP/NZD 2.1277

  • GBP/CAD 1.5603

  • GBP/CHF 1.4643

  • GBP/ZAR 10.968

  • GBP/JPY 130.75

  • GBP/HUF 302.77

  • GBP/NOK 8.9436

  • EUR/USD 1.4131
Sterling lower on interest rate expectations; GDP today

The pound fell broadly yesterday and again this morning, hitting a 5 month low versus the Euro and a 2 month low against the dollar. This was mainly due to a pullback in expectations on how soon interest rates may rise given a still fragile economy.


Sterling's falls have come as weak UK data raised concerns that poor economic growth could push back the timing of interest rate rises from the Bank of England. At the same time, investors expect euro zone interest rates to rise in April, a view that was pushing the euro higher.


This morning at 09:30am we will see the latest GDP figures. The Gross Domestic Product released by the office of National Statistics is a measure of the total value of all goods and services produced by the UK. The GDP is considered as a broad measure of the UK economic activity.


We expect the monthly figure to be -0.6% and the annual figure to be 1.5%. If the numbers are lower than this, then expect a sharp fall in Sterling exchange rates. Given the poor run of economic data of late we are expecting falls today.


If you need to buy Euros then consider either fixing a rate before this, or placing a Stop Loss order. this works by placing a lower level e.g. €1.11, and if rates should drop below this we will automatically secure your currency. This allows you to aim for a higher rate, but have a safety net in place should things not move your way.


Today's Data


Today is important for UK data, with GDP figures at 09:30am. We also have Mortgage approval figures and Money Supply data, so we expect some volatility for Sterling today. We also have some confidence measures from Germany and the USA today.


Keeping track of rate movements


Here on the blog, I give a brief market update at 08:30am with a snapshot of where rates stand. Throughout the day I also update our twitter page with currency rate updates, and important news that's affecting rates. It's a good way of keeping track of things throughout the day.






If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.