The Sterling Hit’s New Highs

A month ago we dwelled on the Pound’s reluctance to move above $1.67, the high achieved at the end of last October. Investors have been on a rollercoaster ride throughout July with the GBPUSD rate blundering between 1.63 and 1.66. The ride must have gathered momentum however, trading around 1.69 today.
The movement is primarily attributed to investors selling US Treasuries, therefore US Dollars, and buying equities and commodities. The positive data from the UK, however, cannot be ignored. Although still a negative value, the UK’s second quarter GDP figure shows the economy is gaining some strength. Consumer confidence is at the highest level since April 2008, and the Bank of England unanimously voted to hold interest rates at 0.5%.
 It still looks as though the eventual break will be to the upside, but there can be no guarantee. If you have an immediate transfer to make, buy now. If you have a couple of months, speak to your exert about utilizing a stop-loss and limit order to protect against a drop or maximize your gains from further upwards movements.   The Euro generally mirrors the trend of the Pound against the US Dollar; however the less than positive data from the Euro zone has dampened this effect with industrial orders under tremendous pressure. We should see a tight range this month for the Euro, trading between 1.45 and 1.46 and staying below the 1.50 level.  

 With Canada being a commodity-driven economy, the Canadian Dollar is benefiting from the current investor trend. Unemployment is rising and interest rates are very low but as long as the equity markets remain stable the CAD should remain strong against the weakening US Dollar. Trading levels between 1.05 and 1.12 are expected.