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Home > Blogs > Currency Solutions
The Pound this week!

Monday

Sterling is starting the week in a fragile state after the media hype of the weekend focused on the surge of support for the Liberal Democrats and in particular their leader Nick Clegg. As various opinion polls veraciously fuel speculation of a hung parliament, the pound sits weakly, falling the most in almost two weeks against the dollar. It has also slumped against the Yen, attributed to the Goldman Sachs investigation.

A large release of UK data is due this week, kicking off with a Right Move report on April’s house prices today. It is expected to indicate a raise, although this should be treated cautiously.

The fact that British pilots have begun to call for a banking style rescue of the UK airline industry, in the ongoing wake of the volcanic ash-cloud, does not bode well for Sterling confidence. £130 million a day is estimated to being lost by airlines due to flight restrictions.

Tuesday

The pound fell sharply yesterday after a surge in support for the Liberal Democrats increased the chances of a hung parliament. Sterling experienced its biggest drop in two weeks against the USD as opinion polls suggested no clear winner will emerge in the elections. The big issue concerning the city is that without clear leadership and a plan to reduce the countries budget deficit, Britain’s AAA credit rating might be put at risk.

Jobless statistics due out tomorrow will be closely watched, but on a positive note mortgage lending figures soared by 24% last month according to the Council of Mortgage lenders.

Wednesday

After a worrying start to the week, the Pound somewhat recovered against the USD and was simmering around the 1.54 mark at European session opening.  Unfortunately, this spike appears to have occurred in tandem with disturbing levels of inflation which suggests the BoE may be forced to increase interest rates prior to Christmas.

Thursday

As we continue to bask in the sun, March retail figures will no doubt show increased levels of spending.  However, Tesco, one of the world’s largest retail groups has come in around 2 per cent short of group trading profit forecasts.  Suggested causes behind this shortfall include recent Currency swings.  This morning’s reports suggest that the Pound will continue to make steady gains against both the Dollar and the Euro.  Everyone has their own opinion about where the gains will end, so for more information have a word to your broker.

Friday

The pound has begun to slip against the dollar immediately following the data release at 9.30 am this morning suggesting a volatile day ahead. The economy has not grown as much as anticipated and GDP has risen at 0.2 percent in the first quarter. Following the Pound’s particularly strong day against the Euro, the disappointing first quarter growth has cast light on Sterling’s fragile state just two weeks before the election and following round two of the televised election debate.

Last night, the three main party leaders clashed over foreign policy and international affairs. The discussion on issues including immigration, Europe and Trident has again indicated voter support was spread between the three parties. The Conservatives are using speculation that a hung parliament will injure UK economic recovery and Sterling as part of their campaign to discourage votes for the Liberal Democrats. Taken overall however, the various post-debate polls indicate an almost dead heat once again.

New figures confirm that the Government’s total borrowing for the financial year was £163.4 billion, the largest of any UK Government in peacetime, and unemployment is at a sixteen year high of 2.5 billion. The third round of the electoral debate on the economy next week will no doubt interrogate the wealth of statistics released this week.

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Nigel Hodges www.currencysolutions.co.uk

POSTED BY ALAN FORSYTH ON FRI 23RD APRIL AT 15:23 GMT
TAGS: UK Economic News


Fiona Parsley

Fiona Parsley

With 20 years financial experience, Fiona Parsley applies her trade with one of the UK’s leading foreign exchange specialists, Currency Solutions.

A Currency Dealer that’s highly respected and liked by her clients, Fiona provides a diligent service to keep her clients up to date with market trends and options, saving them time and money on all transactions.

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