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How Will Sterling Fare In The Rest Of 2010?
2009 was a year of rocky highs and lows on the foreign exchange – as far as the pound went, anyway. With months of negative economic growth behind us, and an unpredictable outlook for the months ahead, what does this mean for foreign currency exchange rates?
At times like this, currency brokers look closely at the 200-day moving average. This arguably gives a much clearer picture than short-term encouragements such as the improved performance of the pound against the dollar at the end of last year. The pound may need to be at least 1.60 against the dollar if we are to avoid the lows seen on the foreign exchange during 2009, yet the current figures indicate a further decline is more likely – especially given the rapid turnaround in strength of the dollar.
The pound has made some gains against the Euro in the foreign exchange rates, mainly due to worries over downgrades of the sovereign debt in the Euro zone. However, the Euro has held well above its 200 DMA, and is holding off further sterling gains. An ascending trend-line of Euro resistance, at around 0.90, could give short-term support to the pound. However, a break above that would weaken the pound still further.
The main advantage the UK has over struggling Greece is arguably a greater degree of independence – we are able to set our own interest rates. However, no state can ignore the possibility of a fiscal crisis.
We at Pure FX can assure our clients that, whatever the current decade holds, we will always get the best possible currency exchange rates – whether you are buying dollars, Euros or Polish Zlotys.
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