It has been a turbulent day for the currency markets especially for the GBP/USD cross. After UK Services PMI missed its forecast this morning the pound fell a cent and a half against the dollar, leaving the currency pair at a one year low. When trading opened this morning GBP/USD was hovering around $1.6025 but soon after the services numbers were released exchange rates dropped to a low of $1.5880.
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However, this afternoon saw the pound recover some of the ground it had lost in the early part of the days session as demand for the pound increased. Sterling's recovery came after news broke that Yildiz Holding, which is the largest food group in Turkey, were set to take over UK based United Biscuits....Who knew biscuits could influence the currency markets!
What to watch out for this week.
It is going to be a busy end to the week in terms of data releases and key speeches. Tomorrow will see the Bank of England and European Central Bank announce their latest interest rate and monetary policy decisions.
It is unlikely we will see any major surprises from Mark Carney or the Bank of England but if Mario Draghi and the European Central Bank drop any hints about stimulus we could see some volatility for the GBP/USD cross as investors leave the single currency.
On Friday the U.S. will release their latest non-farm job numbers which my regular readers will know usually impact the dollars value, so do not be surprised if we see a cent movement in either direction when the figures are released at 13:30 GMT.
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