Sterling Exchange Rate Improves

Yesterday we saw Sterling exchange rates (GBP) improve considerably against a number of the major currencies including the EUR, USD and AUD following the news that the Bank of England had revised up the UK’s growth forecast. Mark Carney, the Governor of the BoE,┬ácommented that the state of UK economy was improving but also went on to state that interest rates were unlikely to be increased for at least another year meaning it is likely to be quarter 2 next year when we see UK interest rates hiked from the current record low. Many analysts had predicted that due to the falling unemployment levels and an improving economic outlook we may see interest rates increased this year and this had supported Sterling so the fact that this now seems highly unlikely means in my view that any gains for Sterling in the short term will be limited. Having said this the positive movement yesterday has meant we are now close to the highest levels we have seen on GBP EUR exchange rates for over 12 months which is clearly good news for those clients looking to buy Euros.

Keeping interest rates low for a long period of time not only helps keep inflation at its current steady level but also helps to avoid any major issues in the housing market with low interest rates meaning money and therefore mortgages are cheaper to borrow which in theory means a stronger housing market. In the UK the housing market is vitally important to the overall health of the economy as so many people have their funds tied up in bricks and mortar. So, with interest rates set to remain low for the foreseable future the hope is the UK housing market and therefore the economy will continue to improve and while this may not mean significant Sterling strength in the short term I expect we will continue to see the Pound continue to rise gradually over the course of the year. In the very short term though for those clients looking to buy Euros it is worth speaking with one of our experienced currency brokers today who will be happy to discuss your currency requirements and the different options available to you.

GBP AUD Exchange Rates

This morning we have seen Sterling Australian Dollar exchange rates (GBP AUD) improve followin a period of AUD strength. This was due to the fact that there was worse than expected employment figures in Australia over night which has painted a worse than predicted picture of the Australian economy. As a result, this morning we are witnessing some excellent opportunities to buy AUD and with the recent comments from Reserve Bank of Australia Chairman Glenn Stevens that interest rates will not be cut further means we cannot rule out GBP AUD falling back again meaning the current levels may be a short lived spike.

Economic Data Due Today

Today we have some key economic data which could effect GBP EUR, GBP CAD and GBP USD. First up is the European Central Bank monthly report which will give an insight into the performance of the Eurozone economy, then this afternoon we have Canadian housing figures and then US retail sales and another speach from new head of the US Federal Reserve Janet Yellen both of which could have a big impact on the US Dollar and the Canadian Dollar.

So, with another volatile day ahead of us and Sterling exchange rates currently experiencing some highs against a number of major currencies it is worth speaking with one of our experienced and helpful currency brokers. You can call straight through to our trading floor for free on 0800 328 5884 or if calling from abroad call us on 0044 1494 725353 alternatively you can email me directly on