Thursday 10th April 2014
Good afternoon. It’s been a busy week since my last post on Monday, and we’ve seen a raft of impressive UK data that caused Sterling exchange rates to rise nicely. We saw the GBP/EUR rate hit around €1.2150 and the GBP/USD rate as high as $1.6820; however in trading today we have already seen rates start to slide back away.
In today’s post I will explain in detail why the figures caused Sterling to rise, and ways in which you can take advantage of spikes like this, which are often very short lived and hard to catch!
UK manufacturing figures cause Sterling to rise
On Tuesday we saw the latest UK manufacturing figures released. Analysts were expecting the figure to show output growing by 0.3%, but in fact output grew by 1%! As the figure was much better than expected, and as you can see in the chart above the Pound spiked hitting as high as €1.2150.
Output now stands at its highest level in more than 2.5 years, and is a sign the UK economic revival is quote strong.
UK Growth forecasts also good for the Pound
Also this week we saw the International Monetary Fund (IMF) says the UK economy will be the fastest-growing in the G7 this year. It said that the UK will grow by nearly 3% this year. So this is quite an upbeat forecast for the UK and helped Sterling gain against other currencies. Only 12 months ago, the IMF forecast 1.5% growth for this year, illustrating how good things are at the moment.
Pound’s gains are short-lived
As is often the case in the currency markets, a sudden rise in the exchange rate can often be very short-lived, and indeed the chart above shows how things have now tailed off, with Pound/Euro back just below €1.21. This is partly due to profit taking, as so many worldwide investors flock to take advantage of the gains, the flurry of buying pulls the rate lower again.
The rate has been getting to these sorts of levels many times this year, only to drop back away again. I expect this trend to continue. In order to take advantage of spikes in the market without watching the rate 24/7, you need to have a good currency broker on your side. If you need to convert one currency to another and targeting a specific rate, then I can monitor the market for you and let you know if your target rate becomes available. Click to here to find about more about the kind of services I offer.
Find out more about the rates and service I offer
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Labels: Best Exchange Rates, currency forecast, FX predictions, Pound/Dollar, Pound/Euro, UK Growth Forecasts, UK manufacturing