The report below looks at the current situation with Sterling and the factors that could affect GBP exchange rates this week.
Against a basket of currencies it is currently the best time to buy the Pound in 13 months. Poor economic data, fears over the UK leaving the European Union, uncertainty on financial markets because of China and the prospect of an interest rate hike being pushed even further back have all contributed to a decline in the value of Sterling. On a trade weighted index sterling has dropped 11% since the start of the year back to previous lows set at the end of 2014. It is the best time in 1 year to buy Pounds with Euros and the best time in 6 years to buy Pounds with US Dollars.
If you have a currency transfer involving buying or selling the Pound now is the time to start making some plans for the year ahead. Yesterday was hard evidence the Industrial and Manufacturing sectors were in decline with data showing much worse figures than expected. George Osborne has boasted of switching the UK economy to a wider Manufacturing base, well... figures for last November showed a -1.2% decline.
Today there is little UK data out but the Pound is likely to remain struggling in the current fresh ranges on most currency pairings. Mark Carney is speaking at 16.15, but I think the big news for those looking ahead on GBP is tomorrow’s Interest Rate decision.
Tomorrow is a big day for UK data and if you are waiting in the wings before entering the market, these releases could be the announcements you have been waiting for. At 12.00 GMT we have the Bank of England Interest Rate decision and monetary policy summary. It is very difficult to see any positive news from this report and we could even see an outside chance of Ian McCafferty, one of the Bank of England members removing his call for an interest rate hike. This would be a final nail in the coffin for an awful start to 2016 for the Pound helping to further improve rates for Sterling buyers whilst increasing the misery and ‘I should have traded last week’ factor for those looking to buy a foreign currency with Sterling.
There is some respite, following such sharp movements you usually see some kind of ‘bounce’ back. You would in my opinion however need to be a very brave individual to be blindly holding on within such a volatile market.
For more information on how future data releases could affect Pound Sterling exchange rates and any transfer abroad, call our currency brokers on 01494 725 353 or email me directly at email@example.com.
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Excellent initial guidance, and during the transaction regular communication and updates. Dealing with Jonathan Watson was a pleasure. Very reassuring.
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