This Pound Sterling overview discusses Brexit progress and looks at some of the factors that could affect GBP exchange rates in the weeks ahead. The below table shows the market movements for a number of currency pairings in the last 30 days:
|Currency Pair||% Change||Difference on £200,000|
Regular readers will be fully aware that headline Brexit news has and will continue to drive Sterling exchange rates for the foreseeable future. Last week Sterling took a tumble off the back of the news that head EU negotiator Michel Barnier announcing Brexit negotiators had hit deadlock. However only hours later rumours emerged that EU officials were preparing to meet to discuss what a potential trade deal would look like if the UK and EU managed to agree on key topics such as the divorce settlement bill and EU citizen's rights. Sterling exchange rates have received a boost as it appears that the EU could have shown their hand early. If it’s the case that the UK and EU are close to negotiating a trade deal, the present rates for selling a foreign currency to buy Sterling may diminish.
UK Prime Minister Theresa May will travel to Brussels today to have dinner with EU leaders to discuss Brexit further. The aim is to overcome the stalemate Brexit negotiations. Expect major volatility Tuesday morning if news is released late Tuesday night outlining how the meeting went.
On Tuesday morning, the UK will release their latest Consumer Price Index (also known as inflation) which will be eagerly watched by currency investors. Over the last 8 weeks the Bank of England have announced that UK interest rates could be hiked as early as November 2nd due to the rising inflation numbers. The Bank of England’s target is 2% and last month’s inflation numbers were released at 2.9%.
With the increase in the Pound's value throughout September (approximately 4-7% against most of the major currencies), I wouldn’t be surprised to see some of the inflationary pressure curbed and for inflation to remain at 2.9% or slightly fall. Couple this with a poor run of UK economic data in recent weeks the likelihood of a UK interest rate hike in November I believe has diminished. However, if inflation does break through the 3% barrier all eyes will turn to the Bank of England to see if they deliver on their words.
The other key economic data release to look out for this week is Retail Sales numbers released Thursday at 9.30am.
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.
First rate service from Dayle Littlejohn in dealing with our transaction from Cyprus. He kept us updated at all times and we appreciated his sincere manner.
First class foreign currency provider, great rates and outstanding customer service.
Great service very professional but with a personal touch. Everything went smoothly with no fuss. Would highly recommend.