The Pound Sterling report below discusses some of the factors that could affect GBP exchange rates this week in order to help you stay informed if you need to make a currency transfer.
In a bad start to the week for Britain, UK construction has fallen to its lowest level in seven years. UK Purchasing Managers Index (PMI) data fell to 46.0 in June from 51.2 in May. A figure over 50 indicates expansion in the sector whilst a figure below 50, as seen here signals contraction. The data covers the period in the immediate run up to the referendum on EU membership and is the first time since 2013 where there has been a contraction.
The concern now is that next month could fare worse as a result of the Brexit vote which could weigh on GDP going forward and ultimately start to bring Britain closer to a potential technical recession. News like this is Sterling negative and exchange rates for the Pound may have further to fall. This morning sees UK PMI data for the much larger services sector which is expected to show a small decline to 52.6 from 53.5. A weaker number this morning could prove negative for Sterling exchange rates today.
There have been many references in the past week comparing Brexit with the TV series’ Game of Thrones and House of Cards following all the political casualties and eliminations. With new developments surrounding Brexit arriving by the hour which are having a direct impact on exchange rates, there has never been a more important period to be in contact with your account manager.
Nigel Farage resigned as leader of UKIP yesterday although my view is it won’t be long before he is back in another role. In another twist law firm Miscon de Reya has started legal action to demand approval from Parliament before Article 50 of the Lisbon Treaty is invoked. The firm is acting on behalf of anonymous clients and suggests invoking Article 50 would be unlawful without the approval of Parliament. Even ex-prime-minister Tony Blair has made the case for a second referendum, although surely he should be more concerned with the Chilcot report due tomorrow.
Bank of England governor Mark Carney will be speaking following the Bank of Englands financial stability report this morning which could certainly create even more market movement for the Pound today.
Mark Carney could not have been clearer when he said last week that more monetary easing will be required this summer which saw the markets react with a sudden fall in the price of Sterling. The markets now expect an imminent rate cut.
As if that wasn’t enough he went one step further and stated that there will be another £250 billion of Quantitative Easing ready if required. This has put huge pressure on sterling exchange rates across all of the major currencies. With no Bank of England meeting this week the question remains whether there will be an interest rate cut at next week’s meeting or in August which should keep pressure on the pound from here on.
For more news on data releases could affect your currency exchange please call our currency brokers on 01494 725 353 or email me directly at firstname.lastname@example.org.
James and his colleagues are always courteous and helpful. I have also never been able to find rates of exchange that are more competitive. I am particularly impressed with the service, as I am not in the habit of transferring massive amounts!
As always a really quick and easy transaction. James is very knowledgeable and helpful. Great rates.
Always helpful and they always give rates at the very top of the range. Quick transfers to our french bank account – highly recommended. Well done James Lovick 😉