This Pound Sterling report looks at the cost of sending money overseas this week and the factors that could affect your currency transfer.

Recent polls indicate referendum vote is too close to call

It’s been a volatile time of late for GBP exchange rates and I expect this trend to continue in the build up to June’s EU referendum.

Whilst most people will have now seen a number of reports discussing the pros and cons of a possible Brexit, my opinion is that we have not yet seen either side provide a clear and calculated argument as to the real benefits of each. There has been a number of scare tactics by both the Remain and Leave camps and of course the on-going propaganda via various door to door leaflets, which I’m sure many of our clients will have received.

This has all culminated in a lot of confusion and the markets are reacting accordingly, with the uncertainty it’s creating causing excessive movement on Sterling exchange rates. Depending on which report you read, you will have heard various key figureheads putting their opinion forward and with both UK Prime Minister David Cameron & US President Barack Obama very much in the Remain camp and previous London mayor Boris Johnson and US Presidential hopeful Donald Trump in the Leave camp, we seem to be at something of a loggerhead.

I am still of the opinion that the Pound will struggle to gain any sustainable market support over the coming weeks and with the most recent polls suggesting that the gap is decreasing between those that wish to stay and those that wish to leave, it is likely this uncertainty will only intensify. The markets are having to factor in all eventualities and if I had a Sterling position I would certainly be looking to give myself some sort of protection ahead of the vote, as we just cannot say with any certainty which way it is going to go.

UK Economic data key to further Sterling support

There will be opportunities for clients both buying and selling but they are likely to be short, sharp spikes and need to be taken advantage of when the opportunity presents itself. We have some key data for the UK over the coming days, with the latest Manufacturing & Industrial Production figures released this morning and then the latest NIESR Gross Domestic Product (GDP) estimate. This is always a key barometer for investor’s, as GDP figures give us a key insight into the relative health of a countries economy. It was the better than expected GDP figures which helped to boost Sterling rates a couple of weeks ago, so expect investor’s to be keeping a close eye on this release.

However, it is likely to be ‘Super Thursday’, which will dominate most of the headlines, with the latest Bank of England (BoE) interest rate decision, subsequent monetary policy statement and minutes from the meeting being released. Whilst interest rates will likely remain on hold, the subsequent minutes and monetary policy stance will indicate the current stance and thinking of our central bank. If any of the BoE members have voted for a rate cut, then expect the Pound to come under further pressure during tomorrow’s trading.

If you would like to discuss anything you have read in this report, or have questions about the EU Referendum and its impact on exchange rates, please feel free to email me directly at mtv@currencies.co.uk. Alternatively, you can speak with any of our currency brokers on 01494 725 353.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.