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Pound moves higher on softening of EU approach to Brexit

We've seen a slight spike in Pound/Euro rates this morning to €1.1350, which is within about 1% of the best we've seen in 8 months. There have been no data releases to cause the move, and the slight strengthening is due to reports that the EU parliament will call for the UK to have privileged access to the single market.

This is a positive move, and the EU parliament will  call for the EU to negotiate an agreement to give access and membership of EU agencies. This is clearly different to what Michel Barnier has been saying until now. The markets clearly like the news, with Sterling rising higher across the board.

This week we may get further clarity on the UK's position on what it wants from Brexit, in various speeches that are due to be given. Anything that signals progress and a lifting of the uncertainty surrounding this issue could send the Pound higher still.

What else could move Pound/Euro rates this week?
In terms of scheduled economic data releases, there are sever…

US dollar surge halted

In the past 24 hours we have seen a significant swing for cable (GBP/USD) with the high/low range from 1.4095 to 1.38 or just over a 2% spread. Much of the movement came following yesterday afternoons inflation data which in fact was stronger than expected.

Normally if you see inflation rise this would prompt the value of a currency to strengthen and indeed the initial reaction followed this trend was for dollar strength. Rising inflation would normally mean that a central bank may look to raise interest rates to stop inflation from rising too high, with yesterdays higher reading it suggested to the market that the Fed will continue its stance with regards raising interest rates throughout 2018. 

Why did the dollar weaken?
Under normal circumstances the dollar should have strengthened yesterday but has now fallen nearly 3 cents since the release. This highlights how fickle the market can be. 

"From a longer-term perspective markets remain uninspired by the US economic prospects and t…

Strong US Data strengthens USD, weakens EUR

This afternoon we saw a host of US Data released, and this has caused some movements for both GBPEUR and GBPUSD rates. The data showed that inflation is higher than markets had been expecting. As a result, it's now very likely we'll see several rate increases for the USA this year.

In turn, the USD has strengthened, as the prospect of higher interest rates increases demand for a currency, increasing its value and making it more expensive to purchase. This has caused GBP/USD rates to fall further today, from $1.3925 to $1.3825.

We've seen an inverse move in GBP/EUR - this pair has risen from €1.12 to €1.1240. This is because a very common currency pair is EURUSD. As the Dollar has gained today, investors have sold Euros to buy the Dollar. As Euros are sold, they decrease in value, becoming cheaper to buy and pushing GBP/EUR rates higher.

So as you can see, despite the lack of any data today from the UK or any Brexit developments, you can still see significant moves in St…

Monthly update for GBP, EUR, USD, AUD, NZD, CAD

Monthly Currency Focus: GBP Down on Brexit Concerns, USD Boosted by Fed Hike Hopes 
We’ve seen some pretty notable movement in the currency market over the last few weeks, with the Pound falling from its best levels amid ongoing Brexit concerns, the US Dollar recovering from its January downtrend and the Euro being bolstered by German coalition developments. In today's post, we'll take a look at the main currencies we trade.

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Pound Sterling (GBP)
Sterling surged in the wake of the Bank of England’s (BoE) first policy decision of 2018, with the British currency climbing against most the majors as the central bank indicated that further rate hikes are on the way. The Pound was also supported by the BoE’s decision to raise growth forecasts – but GBP’s gains weren’t to last. Sterling swiftly plummeted from its best levels after the EU’s chief negotiator Michel Barnier implied that the UK may not be granted a tran…

Stock market correction lends support back to the pound. What could happen to sterling exchange rates?

Following Mondays bleak day for global stocks in which the Dow Jones fell by 4.6%, its largest daily loss since 2011, markets have made some what of a recovery lending support back to the pound.

In particular we have seen the pound make a good recovery against the US dollar up from yesterdays low of 1.38 to reach a day high of 1.3950 although this current market volatility we are seeing could easily continue for the rest of the week.

Looking away from stock market fluctuations and anyone with an interest in the pound should focus on tomorrows Bank of England interest rate meeting and accompanying statement. Again we are not expecting to see any action from Mark Carney but his accompanying statement is the area to focus on. With many of the major central banks, in particular the Fed hinting at future interest rate hikes the markets is looking for clues as to when the UK may follow suit. Indeed the prospect of future interest rate hikes in the US was much of the reason the stock markets…

Risk appetite hits the pound, what is in store for sterling this week?

Sterling has posted some losses to start the week following yesterdays poor service data as the the service sector clocked its slowest rate of expansion since September 2016 in January.

As a result, the Pound (GBP) trended lower across the board on Monday, with its weakness exacerbated by the latest signs of division over Brexit within the Conservative government.
Sterling is  a currency that many see as risky option due to concerns surrounding Brexit. As a result, and following a significant shift in global risk appetite, sterling has been one of the biggest losers.
Yesterday global shares took a tumble, with the US market taking a particularly big hit. In fact Monday was brutal for stocks with the Dow Jones index falling 4.6%, it largest fall since August 2011 and the aftermath of "Black Monday" when Standard and Poor's (the US credit rating agency) downgraded the US. 
This sentiment was felt in European and Asian markets creating a huge market sell off. As a result st…

Leaked Government Brexit analysis stops sterling in its tracks

Yesterdays leaked  Government document surrounding Brexit suggested that in every scenario the UK will be in a worse off position. In the document released on website Buzzfeed, it suggested the UK growth could be as much as 8% worse off depending on what is agreed with our European counterparts.

This release has firmly halted sterling in its tracks and once again the elusive 1.15 seems to be a hurdle too far for the pound to consistently surpass. This is now the 6th occasion in the last 6 months the pound has reached 1.15 and once again a quick sharp correction has been seen.

Other significant moves have been seen against other majors such as the US dollar. At its peak last week GBP/USD traded at 1.4325 and this morning, albeit very briefly, it fell below 1.40, a fall of 2.3% in just over three trading days. Again highlighting how volatile this current market is.

For anyone looking at EUR or USD positions, particularly those buying euros and dollars, don't be too disheartened. In …