Pound consolidates gains

Sterling enjoyed another strong showing yesterday, with rates for buying Euros hitting their best for a year (helped by weaker than expected German trade data) and rates for buying US Dollars at their cheapest since 2011, before the Federal Reserve spelled out their rationale for less tapering in the US economy in the evening.

Today we have UK trade balance figures in the UK at 9.30am, followed by Eurozone confidence numbers at 10am and then the monthly interest rate decisions from the Bank of England and European Central Bank. While no interest rate changes are likely, the Eurozone decision is followed by President Mario Draghi’s press conference, which usually causes volatility as markets are on the lookout for clues to future monetary policy as well as overall economic prospects in the single currency area.

Historically January has not been a good month for the Pound, will 2014 prove to be different or will we see the wheels coming off the economic recovery in the coming weeks? Nobody knows of course but what we do know is that the Pound is riding high against many major currencies and compared to rates that were available for much of last year, it is not a bad time to be securing a rate for that overseas purchase.

On a final note tomorrow is also likely to be a busy day, with Eurozone GDP, UK manufacturing, and US non-farm payrolls all due out to give us something to think about.