This currency update will discuss factors that are likely to affect Pound Sterling exchange rates this week if you are buying abroad or making a currency transfer.
Throughout the course of yesterday’s trading session, the Pound weakened against all of its major counterparts following from poor UK Retail data published by the Local Data Company.
The report showed a dramatic downturn in new shop openings for the first half of this year, where shop closures outweighed openings by just under 2000, down 15% compared to the last half of 2015. This came as a surprise to the markets as the first few months of the year is usually the time when many new shops begin trading, and is likely to be due to economic concerns prior to the Referendum in June, combined with fears over the gloomy outlook of the global economy.
Many larger stores are also feeling the pressure, with retail giant The John Lewis Partnership aborting plans last week to open 7 more Waitrose stores. This news provided any clients purchasing pounds with a great opportunity to capitalise on, with the best EUR/GBP rates seen in almost 4 weeks, and USD/GBP rates in 5 weeks.
This morning at 9.30am will show the release of Public Sector Net Borrowing figures by the National Statistics, and the expectation is for a huge increase in UK Government debt since the Referendum, from £-1.5billion to £10.3billion. If these figures are negative as expected, we could see further falls for Sterling this morning. This will be followed by the Bank of England’s Quarterly Bulletin and may give us a clearer picture of economic developments in the UK.
The key data to watch out for this week for any clients looking to buy or sell Sterling will be the US Interest Rate decision this evening, as it has the capacity to create huge market volatility. It is expected that the FED will keep interest rates on hold at 0.5% but any variation from this, or hints towards a hike at their next announcement in December could result in further Pound weakness as Investors pile their funds into the Dollar. As this release is outside of trading hours I would strongly recommend getting in touch with your Account Manager here before this announcement to put together a plan which best works for you.
For more information on how future data releases could affect your currency transfer please call our trading floor on 01494 725 353 or email me at firstname.lastname@example.org.
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