After 9-months in the 1.125-1.15 range, GBPEUR has since been fluctuating between 1.1194 and 1.138, with the low rate of 1.108 observed last Thursday as speculation that the UK government was preparing for a Brexit no-deal weakened the Pound. Today's Sterling report covers the latest impact from Brexit on the Pound as well as an outlook on economic data for the UK. The table below shows the difference in a number of currencies you could have achieved when selling £200,000.00 during the high and low points of the past 4 days.
|Currency Pair||% Change||Difference on £200,000|
This is the same reason we saw Sterling drop under the 1.30 resistance point against the Dollar last week and since then, has been unable to recover. In one-month GBPUSD has moved from 1.327 to 1.275, making a $200,000 transfer £10,400 more expensive if timed optimally.
This week in the UK there are a string of key economic releases which will be closely watched especially as they come just after the Bank of England raised interest rates to 0.75%.
Today at 930, we will see Average Earnings statistics for June. Whilst recent wage growth figures have come in below market expectations, a fall in the number of hours worked by full-time employees have provided a bit of a boost to growth and output per hour. The consensus is expected as the same as the last reading however any fluctuation from this release could move rates for or against you depending on your position.
On Wednesday, we’ll find out if domestic inflation is on the rise when figures for July are released.
On Thursday, retail sales data will tell us how strong spending growth has been in July following robust sales figures in the second quarter of this year with big events such as the World Cup.
This summer we’re seeing a huge charm offensive from Theresa May and her cabinet of Brexit officials as she tries to put off the possibility of a no-deal. Why are we suddenly worrying about that? Well, we saw her white paper Chequers agreement, we have had lots of anger from Conservative MPs and a mixed reception from Brussels.
So, over the next few weeks while Theresa May is on holiday you can be sure that diplomats from the UK will be in Brussels, trying to convince the EU to give the UK a fair hearing and give the PM a chance to get her Brexit deal over the line before she puts it in front of MPs in October.
There are still many hurdles to come, trying to stamp out things like the no-deal possibility and the Irish border issue, which could stall any sort of agreement.
The spike in Sterling’s favour against the Euro since Friday is more down to Europe’s - ties with the Turkish economy – weakness rather than UK strength. As this crisis unfolds, it is well worth being in touch with your account manager.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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