Sterling Pound Review February 20th

Difficult to get “inspiration” one way or the other regarding sterling’s possible movements over the coming weeks and given the lack of key UK data releases, it is likely to be political machinations that are most influential on its movements this week.

Last week’s UK data disappointed; average earnings declined and retails sales for January disappointed. Is the UK economy beginning to stumble and are UK consumers, a key driver of the UK economy, beginning to worry and is this the start of them spending less until the uncertainty is resolved? Would make sense given so many unknowns.

But the European Union still has its many worries; the pending elections, Greek debt and high unemployment in certain regions. And although the US economy is hitting new highs the political uncertainty is troublesome although unlikely to derail an increase in US interest rates sometime soon, maybe in March. The US dollar appears to be in the best position, but looks can be deceptive as President Trump views a strong dollar as an unfair advantage for other countries such as Germany and China.

That is why currency risk management is such a key part of currency exchange as the movements, when they happen are very quick and usually significant which can result in major losses, something best avoided.

 

Tags: Sterling Pound Review Marbella Benahavis
Posted on February 20th, 2017