Yesterday, the USD did pretty much the opposite of the EUR and the movements were dominated by the news from Europe.
In a rapidly moving few hours, the GBPUSD moved sharply downwards to 1.4120 then swiftly reversed and topped out at 1.4305. Afterwards we have seen a slight pull back.
Today, that trend seems set to continue with a sparse economic calendar.
The news from the European Central Bank dominated the movement of major currencies yesterday. It broke down into a few key parts: first, let’s dissuade overnight institutional lending and increase the balance sheet to pump more money through the economy. Second, we won’t do more than we are currently doing, that’s your lot.
The first part was expected the second….not so much. As a result, the rate whipped quickly one way and then the other. We’re talking large strides too, peaking around 1.3050 before crashing to 1.2750 in a very short time.
After which, the GBP was able to recover a cent to be around 1.2850 now.
After a wild ride, the Pound is playing out more reliable movements now. Normal service seems set to resume against the dollar by the look of things, perhaps we will lose some ground as uncertainty encourages investment to the USD.
The GBPEUR is showing steady improvement for the Pound as the news from yesterday is interpreted and buyers and sellers find value again.
Today, I expect that has yet to settle completely, and only second tier economic data is due.