Pound Holding Its Ground
Despite a mixed bag of data last week, the Pound managed to improve its value yet further against the Euro, and even managed to post some gains against the US Dollar. Inflation and retail sales figures were both sterling-negative, as were the Bank of England minutes, but the markets seem to be more focussed on macroeconomic problems these days. A slight fall in unemployment was the only vaguely good news for UK plc.
There were also gains for the Pound against the South African Rand.
As rumours of a Spanish default gain pace, many buyers are now taking advantage of excellent Euro rates. The US Dollar (and pegged currencies, eg AED) have seen strength in recent weeks but any signs of weak US data this week will likely increase expectations of more monetary easing in the US, which would probably lead to a weaker dollar and better rates for sending USD payments.
There is not a huge amount of data out this week, although the revision to UK GDP, on Wednesday, could affect the pound. Any downward revision would mean the recession is deeper than previously thought and could bring exchange rates down. Conversely, sterling would gain some strength if there are any signs of recovery – although the IMF have just downgraded their forecast for UK growth this year to just 0.2%, so we won’t be holding our breath for positive news.
Elsehwere, the New Zealand and Australian Dollar rates both fell last week, as both currencies gained in price. We have the New Zealand interest rate decision and Australian inflation on Wednesday, so if you are looking to send a transfer in either currency, check for any helpful movements on Wednesday morning.