We are in a quiet period with little news and low trading volumes as most sensible people make the most of the festive period. Sterling has lost a little bit of ground against the euro and the US$. But it is against the commodity backed currencies that the biggest change has happened with sterling losing significant ground on Tuesday. This was a surprise given that China had raised their interest rates over the weekend which is usually a negative for commodity backed currencies as it signals an effort by the Chinese Government to “manage” the rapid growth of their economy.

As trading volumes are low markets can move very quickly, as we have seen with the commodity backed currencies, and that is why it is so important to get in touch as early as possible to minimise downside risk.

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