The pound ticked higher on Thursday, firming in response to the UK government announcement of a new job support scheme.
It’s been a pretty rocky few days for the pound Sterling exchange rate, with GBP first returning to around multi-week highs versus many of its peers, only to tumble into the weekend.
The economic data calendar has been fairly uninspiring over the past few days, but geopolitical developments have largely helped to improve the pound’s appeal as a stable place to hide away from volatility elsewhere in the markets.
Although Sterling is by no means immune to fears of a global trade war, the fact that the EU and UK recently agreed a Brexit transitional period means that the economy will have an extra two years, give or take a quarter, to enjoy the strong trade links that come from being a member of the European Union, while simultaneously negotiating its own deals.
With the first quarter of 2017 drawing to a close, much of the pound’s movement over the past few days has come from traders adjusting their portfolios as part of routine housekeeping before the second quarter begins and the UK financial year draws to a close.
Although this week’s UK data calendar is fairly empty, it is not without impact. Although the Markit manufacturing PMI for March has already been released, it will be followed tomorrow by the construction index and on Thursday by the significantly more impactful services index.
Weakness in the services or composite indices could push the pound lower, while signs of strength in the UK’s dominant sector would see appetite for Sterling increase.
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)