GDP Figures Hold The Key For GBP Exchange Rates
It is expected to be a quiet day in the currency markets today with no major UK economic data releases due and so the markets will be awaiting the UK Gross Domestic Product (GDP) figures on Thursday. The GDP figures are the first set of figures for Quarter 2 of this year and despite the fact it will go through several revisions the data will be key for the short term movement of Sterling exchange rates. Last quarter we heard that GDP hit 0.3% which meant we were not in recession and was actually better than some analysts had expected. This quarter the consensus is that the figure will be even better still with 0.6% the predicted number. Should we see GDP hit these high levels then we could see further Sterling strength and exchange rates may push up higher and if we were to beat the expectations we could see a real jump for the Pound. However, the opposite is also true and if the figures from the Office for National Statistics comes out below expectation then we could see GBP weakness making currency transfers more expensive.
Personally I believe that the recent spate of positive economic data releases will keep GDP strong but 0.6% is a high estimate and so it will be a surprise if we do see it above this figure. I imagine that the Bank of England and the UK government will be pleased to see GDP figures continuing to rise and it regardless of the actual number the fact that GDP is on the rise does show that we are starting to see a recovery, this may be a slow and protracted recovery but a recovery none the less. As I have said before I do not expect to see the UK experiencing the good times we saw back in 2007 any time soon but I do think that this time next year we will see interest rates rising again (albeit gradually), Quantitative Easing to be reduced if not stopped altogether and inflation starting to come back towards target (although it is likely to get a lot higher before it does). All this means for Sterling exchange rates that in time we could start to see it strengthening again. Back in 2007 Sterling was trading against the Euro at 1.5263 and against the US Dollar at 2.1046 and while I believe it to be highly unlikely we will see these exchange rates again I do think that with the discussed improvements we may see the Pound move back up against the major currencies which will be welcome news for those clients looking to send money abroad.
If you need to transfer funds internationally and you would like to discuss the current market prices and the currency market outlook then speak with one of our currency brokers today who will be happy to discuss your currency requirements and the options we have available. All of our numerous currency contracts can be tailored to your individual requirements and this coupled with being able to discuss the market outlook with one of our experienced brokers could help you make a more informed decision as to when to transfer your funds abroad. For more information contact us today on 01494 725353 or email me on firstname.lastname@example.org.
Congratulations Kate and Wills!
The fantastic news last night that the Duchess of Cambridge had given birth to a baby boy has unsurprisingly sparked huge media attention and is likely to be grabbing the headlines for some time to come. As the world focuses on the new arrival, the third in line to the throne, there may be a little less attention paid to the economic data releases so we may see a little more stability in the currency markets over the next few days which for many may be a good thing. In the meantime from all of us at Foreign Currency Direct plc congratulations to their Royal Highnesses the Duke and Duchess of Cambridge and welcome to the world the Prince of Cambridge.
To contact us here at Foreign Currency Direct plc to discuss your currency requirements and the different options available to you please call us on 0800 328 5884 or alternatively if calling from abroad you can call us on 0044 1494 725353 or email me on email@example.com.