The euro slumped on Thursday following the European Central Bank’s (ECB) latest interest rate decision.
Appetite for the pound picked up again on Tuesday after public borrowing figures showed that government borrowing was more-or-less on target for the 2016-17 financial year. Borrowing was much higher-than-expected on the month in March, but down £20bn on the previous year at £52bn – its lowest level since before the global economic crash.
After a quiet Wednesday, more CBI data was released on Thursday; this time supporting the pound higher. Retailers reported the largest surge in sales volumes since September 2015, suggesting consumer activity was set to rebound in the second quarter after slumping during the first three months of the year.
Friday’s GDP figures therefore did not concern investors as much as may have been expected, despite printing -0.1% below forecast on the quarter. Yearly growth rose from 1.9% to 2.1%, which was also worse than economists had predicted.
Although there aren’t many reports on this week’s UK economic calendar, those scheduled for release have the potential to spark pound volatility. Markit surveys will show whether the construction and services sectors saw accelerating, stagnating, or decelerating growth in April. As the services sector accounts for around three-quarters of all UK economic output, a decline in this figure could send the pound lower. Conversely, an unexpected improvement in output may give GBP exchange rates a boost.
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)