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It was a good day for sterling yesterday as it gained around one percent against both the euro and US dollar. GBP/EUR rates hit a low of 1.1868 in early trading before rising to a day high of 1.1987. GBP/USD followed a very similar course, bottoming out at 1.3072 before peaking at 1.3192.
GBP/EUR exchange rate graph
GBP/USD exchange rate graph
The pound was given a welcome boost after figures released yesterday afternoon showed that UK unemployment fell to its lowest level since July 2005. The total amount of unemployed people in the UK fell to 1.65 million, down 54,000 from the previous quarter, and the unemployment rate is now sitting at 4.9%.
This was a very positive announcement in a seriously uncertain time for the UK but the next round of figures could be another area hurt by the Brexit. These figures were for the time between March and May, the period before the UK voted to leave the EU. Many analysts believe that the unemployment rate could gradually rise now that we are no longer part of the EU as companies will put hiring on hold and some, which have been hit hardest by the Brexit, may have to look at cutting the amount of employees they currently have.
Whilst we have all mainly been looking at the pound Post-Brexit, the US dollar also had a very good day yesterday. After a string of positive data releases out of the US recently and a strong increase in stock prices it has now once again fuelled speculation that the FED will raise interest rates before the end of the year. A rate rise when the FED meet next week is highly unlikely but some analysts are now expecting the FED to move on this as early as September. This increase in speculation helped the US Dollar rise to a four month high against a basket of currencies yesterday.
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Here at the Foremost Currency Group we can act as your eyes and ears on the markets to help you find the opportune timing to make the most of your currency. We have a number of different contract options to help safeguard your funds against adverse market movements. One of these being a Forward Contract whereby you can lock in an exchange rate for a future settlement date by simply placing a small margin against the trade.
If you would like to speak with one of our professional, knowledgeable currency specialists please get in touch for a free, no obligation consultation.
Todays Data Releases
Out of the UK today we have Retail Sales and Public Sector Net Borrowing figures, both released at 9:30am. These both have the potential to move the markets so any deviation from the expected outcome could cause volatility on sterling crosses.
It could be a fairly big day over in the Eurozone today. We start off the day with some low key bond auction figures from Spain and Italy but these will be followed by the ECB Interest and Deposit Rate Decisions. Whilst it is not expected that either of these will change there will be a monetary policy statement and press conference after the rate announcements. Mario Draghi has a knack of moving the currency markets when he speaks so it is worth keeping a close eye on this if you have a euro requirement.
Across the pond in the US today there are quite a few data releases but none that really jump out as key. The most significant releases from the US today come in the form of Jobless Claims figures, a Philadelphia Fed Manufacturing Survey and a Housing Price Index.
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