020 7898 0500Sterling has been unable to break through significant resistance against both the euro and the dollar. Although the pound has recovered most of its losses since the start of March, the GBPEUR 100-day moving average is providing support for the euro. We have noticed that the 55 and 100DMAs have converged: a sign of how range-bound this exchange rate has been for some months. Whilst this might on the face of it appear to provide a degree of certainty for businesses exposed to the euro, it should be noted that whilst volatility is low, it isn’t uncommon to see moves greater than 2% in a matter of days. An effective risk management programme will insulate your business from negative rate movements.
It’s a similar story versus the dollar, with the pound having recovered recent losses but bouncing from approximately the same high on Wednesday and Tuesday of this week (incidentally, the same peak reached on 27th Feb).
