Sterling gained against the euro and recovered against the US dollar yesterday, spurred on by growing turmoil in the euro zone over Greece and a surprise move by the European Central Bank to cut interest rates. It has been a mixed week for data in the UK this week with better than expected growth and construction numbers, but poor services and manufacturing data. However, the main driver of sterling this week has been the ongoing crisis in the euro zone and the shock announcement on Monday that Greece will hold a referendum on the bail out. Call in now for a live exchange rate and take advantage of the volatility.

In the euro zone, Monday’s shock announcement by the Greek Prime Minister George Papandreou sent panic through financial markets as a ‘no’ vote means that Greece would default on a large bond repayment in December and cripple financial markets. Whilst this was called off on Thursday, there is further political turmoil expected today with a strong chance that the PM will lose his majority. Concerns over high inflation in the region switched to concerns over growth yesterday as the new ECB President Mario Draghi announced his arrival at the ECB with a 0.25% rate cut. Volatility is set to remain high – call in and set a target price with on of the trading team.

In the USA, you might be forgiven for thinking that Europe has been the main focus for several weeks, but today sees the monthly release of key US data in the form of the ‘non-farm payrolls’ – seasonally adjusted employment figures that can have a large impact on economic expectations. Analysts are expecting a slight drop in the number of jobs added and expect the unemployment rate to remain at 9.1%. Call in now for a live exchange rate.

Elsewhere, sterling has made significant gains against ‘riskier’ currencies such as the South African rand and Scandinavian currencies as investors pull out of risky trades in the face of the European crisis. If you have Australian or New Zealand dollars to buy too, this is potentially a good time to be thinking about doing just that. Have a great weekend.


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