Sterling climbed against the euro on Friday after persistent ‘real money’ buying (i.e. physical purchase rather than speculative trades) saw sterling shrug off the fact that producer prices had dropped marginally. A large corporate account bought large amounts of sterling throughout the day, which also helped stabilise sterling against the US dollar. It is a relatively busy week for data with inflation, labour market and retail sales data all released over the coming days. Inflation is expected to remain above 3.2%, which will decrease the likelihood of further Quantitative Easing. Adam Posen is due to speak later in the week – he is currently the only advocate of pumping more money into the economy, so call in sooner rather than later to ensure you don’t lose money if the markets move adversely.

In the Euro zone, panic over the debt crisis has calmed slightly over the last week, with Ireland expected to put through the new budget legislation later today that will leave the country with the toughest budget for a number of years. A two tiered system has also begun to emerge, with the German economy seemingly on full throttle but towing the rest of Europe behind it. There is German economic sentiment released tomorrow and industrial and manufacturing figures later in the week, which are likely to send conflicting messages to already cautious investors so call in now for a live exchange rate.

In the USA, Tuesday sees the first meeting of the Federal Reserve since last month’s announcement of a second round of Quantitative Easing in what has since become known as “QE2”. The Fed announced an additional $600bn of monetary stimulus and there is likely to be no change this month as the Fed allows the impact of the additional purchases to take effect. In addition, there is inflation data released on Wednesday, so get in touch now to ensure you buy at the best rate.

Elsewhere, inflation shot up in China as figures released on Friday showed a reading of more than 5% against a figure of 4.4% last month. Markets have been braced for an interest rate hike, but this has not happened much to the confusion of some analysts, as from all accounts, China could be heading for a bubble. Call in now for a live exchange rate, as China’s movements have a far reaching impact.


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