Sterling ended last week’s trading down against all major currencies, with EUR rates weakening to levels seen last March, around 1.13 and USD rates reaching 1.30, the lowest it’s been since November last year. The Sterling report below discusses upcoming data releases this week in what has been a quiet week so far. The table below shows the range of exchange rates for a number of currencies during the past 24 hours.

Currency Pair% ChangeDifference on £200,000
GBP/EUR0.32%€714
GBP/USD0.56%€1,480
GBP/AUD0.42%AUD$1,502

There’s been little movement for sterling this week, with sideways movement against the EUR and USD levels returning to the 1.31s despite a slight slump at the start of the week.

 

If an election is announced I would expect this to weaken the value of Sterling dramatically and we could see GBP/EUR rates back below 1.10. There have been few updates on a Brexit deal to help the Pound to make any considerable gains, and unless we see any progress with Brexit talks I would expect Sterling exchange rates to remain low, therefore clients looking to sell Pounds may wish to move sooner rather than later.

Sterling movement this week will largely be influenced by the outcome of the Markit Services PMI data for June released this morning and following the Governor of the Bank of England Mark Carney’s speech on Thursday.

The Markit data release is an indicator of economic climate within an industry sector and the release is expected to show an improvement on the past two months with a reading of 54, also indicating continued expansion.

Carney’s Speech on Thursday is expected to suggest that the UK’s economic stability is robust, despite little improvement shown in past quarters economic data and the ongoing Brexit uncertainty. The speech will also be closely watched by investors, following the Bank’s decision to keep interest rates on hold last month, as any indication of a potential hike next month will likely affect confidence in the currency.

Chequers Cabinet Meeting

There could be another important market mover for the GBP this week, with the Chequers Cabinet meeting set to take place this Friday.

The Chequers summit is aimed at fixing the Government’s position on key areas of a trade deal with Brussels, but details remain vague on a reported “third way” to manage the customs arrangements at ports and the Irish border.

Any slight ambiguity following the meeting will surely add to the current frustration of EU leaders, who increased pressure on PM May yesterday, with Dutch president Mark Rutte saying that ‘urgent clarity’ was needed regarding every aspect of the future relationship between the UK and the EU.

There is clearly the potential for volatile end to the weak for Sterling, so it would be worth contacting your account manager here to discuss strategy in relation to any upcoming transfers you might have planned in the short term.

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.

Download our monthly currency forecast

Download here

News

Read more articles
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.