After a volatile time in the currency market, the trend continued with GBP breaking through the €1.43’s against the Euro and back through the $1.52’s against the USD at the mid-market. These are the highest levels we have seen against the Euro for the past three months.
The main reason we saw these gains were down to the monthly UK CPI reading released by the Office for National Statistics (ONS). The CPI data came in at the expected level, which was also the same as last month, of -0.1% you would expect this negative figure to have an adverse effect on the pound but the fact that Core CPI came in better than expected at 1.1% it showed some more Sterling support. Core CPI is released at the same time as the CPI data but is considered a more accurate gage of inflation as it strips out such factors as food and energy. Sterling has gained just over 5% against the Euro since the 22nd of October so in the space of 4 weeks your property purchase of €350,000 has become over £12,000 cheaper.
Yesterday also saw the release of the US’s CPI data which came in at the anticipated 0.2% which was an improvement on last month’s reading of 0%. These strong figures have added more support to the Federal Reserve’s potential interest rate hike. The FED have been expected to raise rates for a while now with the move becoming more likely in their meeting on 15th December. US futures are now saying that there is a 70% chance of a rate hike in December. The reaction to this release was rather muted as many feel a rate hike may have been priced in to the markets.
After a busy Tuesday full of data from across the globe, today is a much quieter day. There is no data releases to note from the UK or the Eurozone. The US is very quiet until 7pm when the Federal Open Market Committee (FOMC) release their latest meetings minutes. These will be closely scrutinised for any clues or hints towards the potential US rate rise I mentioned earlier in the report.
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If you have an up and coming currency requirement the graphs above show you how much the markets can change in a short space of time. If it is a property purchase or if your business is exposed to the FX markets feel free to get in contact with an expert currency broker at Foremost Currency Group who can explain the various tools we have at your exposure and also put a plan into action to try and make the most out of the timing of your transaction and achieve you the best rate possible.