Another Sterling week from Currency Solutions! a little shorter than usual thanks to the Easter Bank Holiday Monday but our comprehensive day-to-day review from our friends at CS helps you keep up-to-date with all things money.

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Tuesday

The Pound traded down versus the Dollar and made slight losses to the Euro this morning as mixed political polls hampered Sterling’s exchange rate.

The prospect of a hung parliament has hammered sterling down almost 10% versus the Dollar this year alone as investors worry about a weak government's ability to tackle the UK's gaping public finance deficit.

Wednesday

The BCC’s latest survey has revealed the UK’s economy continued to grow in the first quarter, although it is still election polls that are likely to influence Sterling over the coming weeks up to the announced election date of 6Th May. 

Sterling took a slight dip following the election date announcement but quickly recovered due to other worldwide events.

The latest polls have revealed a narrowing gap between the two main UK parties, currently suggesting the Conservatives may not win an overall majority.

Sterling therefore is doing well to be sitting high against the Euro at 87.93 pence.

The GBP/USD is attempting to break below the support area of 1.5238 with little movement so far today.

Thursday

The pound continues to feel pressure from political uncertainty as a mixed bag of polls did little to clarify the murky prospect of a hung parliament. This morning two opinion polls showed Britain's ruling Labour Party has gained ground on the main opposition Conservatives, but a third suggested the Conservative Party had extended its lead.

This pushed sterling down almost half a percent in the currency exchange market to a session low of USD1.5149, and at 0919 GMT traded around the 1.5225 mark.

A report in a UK newspaper citing the Bank for International Settlements saying Britain will need "drastic" austerity measures to reduce public debts is also thought to have kept Sterling under selling pressure.

Friday

The pound rose to USD1.5333 earlier today, its highest level since March 17th, with the week's robust set of data keeping the wind in Sterling’s sail.

Yesterday's decision to leave interest rates unchanged went virtually unnoticed amongst speculators but Sterling held firm since production data came in above market expectations yesterday while house price data for March showed an increase of 1.1%. Today's producer price data should provide further direction as to whether or not inflation continues to edge lower as suggested by the Bank of England's price forecasts.

Sterling has since settled from its high against the Dollar to trade at 1.5284 at 0904 GMT and EUR1.1449.

Nigel Hodges www.currencysolutions.co.uk