The pound gets knocked down, and gets up again…
This week’s economic data releases triggered plenty of volatility for the pound.
On Tuesday, as UK Inflation figures held at a steady rate of 2.6% (the same as the previous month), the pound fell 0.43% against the euro, its lowest level in almost eight years, and 0.83% against the US dollar. However, the pound is still at a higher level against the dollar than it has been previously this year - a gloomy 1.1984 on 16th January.
On Wednesday morning, UK unemployment figures fell to 4.4%, its lowest level since 1975. Wage growth was also up 2.1%, boosting the pound 0.21% and 0.19% against the euro and US dollar retrospectively.
On Thursday (today), retail sales figures came in higher than the previous month. Forecasts suggested a growth of just 0.2% yet the actual data came in just above this at 0.3%. The pound also bounced back a further 0.2% against major currencies, bringing it close to where it had been on Monday.
This mixture of low unemployment, wage increase and the rise in retail sales figures, brings optimism at the end of the current consumer slowdown.
If unemployment and inflation figures fall or stay the same, and UK wage growth continues to rise we could see a positive reaction for the pound in the coming months.
What to look out for?
Next Tuesday, the Governor of the Bank of England, Mark Carney, will present the UK Inflation Report to the Parliament’s Treasury Committee. Investors will be looking for hints of an interest rate rise. This could potentially lead to further volatility for the pound.
However, Caxton customers can be rest assured that -- even at times of high volatility – they will get a better rate with us than they will at airport bureaus and most High Street banks.
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