This report will examine the factors that could affect exchange rates this week in order to help you stay informed if you need to make a currency transfer. The table below shows the difference you would have received when buying £200,000 at the high compared to the low during the last month. For current live exchange rates click here.

Currency Pair% ChangeDifference on £200,000
GBPEUR3.32%€7,180 EUR
GBPUSD2.13%$5,520 USD
GBPAUD5.88%$13,460 AUD
narrow win on the brexit vote

Will Sterling fall further this week?

Sterling has been slightly weaker following the Bank of England’s historic decision last week to raise interest rates by 0.25% to 0.5%, undoing last year’s post Referendum cut. An economic focus had been a welcome change of tone for Sterling exchange rates but this week Brexit and certainly politics will be back on the agenda.

Headline news focuses on the offshore tax avoidance schemes of the wealthy and sexual harassment cases in Parliament. With key figures in the Conservative Government resigning and caught up in both scandals, this will do little to bolster confidence in the beleaguered Pound. These stories will develop further this week and so with it their impact on the Pound.

Brexit talks begin again on Thursday with Michel Barnier and David Davis meeting to recommence discussions on Brexit. Further interesting events this week are the CBI (Confederation of British Industry) conference today which will urge the Government to get on with the job at hand, i.e. Brexit. Such a call is most welcome for it is the uncertainty and unknown nature of Brexit that has seen Sterling lower.

Was the Bank of England right to raise rates?

Tomorrow we have the NIESR (National Institute of Economic and Social Research) GDP (Gross Domestic Product) estimate due at 3pm. If you are looking to buy or sell the Pound in the coming week this is the key news to focus on. The GDP data will show the last 3 calendar months of economic growth and gives us some guidance as to how correct the Bank of England was to raise rates.

The Bank of England has come under fire for not being overly clear about the pace of future hikes. Markets did not like this lack of clarity hence why we have seen the Pound fall. With the Bank of England failing to plot a clear path to further hikes, which they will struggle to do in the face of uncertainty over Brexit, the market has made up their own mind about the future with the next hike expected in August 2018.

Tuesday sees the latest Halifax house price data, the previous month’s data showed a 0.8% increase which is some welcome news for homeowners. Friday sees Industrial and manufacturing data which overall is expected to come in slightly worse but any surprise may lift the Pound. Trade Balance data also due could see a busy end to the week for the Pound.

What lies ahead for Sterling exchange rates?

Fresh GDP data and analysis over the personal conduct and private behaviours of MP’s and the wealthy seem the most likely drivers of sentiment for Sterling this week.

Those looking for clues further ahead have the budget on the 22nd November and the ongoing Brexit talks. Despite failing to meet with the high expectations set prior to the BoE decision, overall a slightly more positive outlook on both Brexit and the UK economy leaves Sterling better off than two months ago. With the Article 50 period ending in just shy of 1 year and 5 months there is still plenty of uncertainty ahead. It has been 1 year and 5 months since the vote took place and look what has happened since. Clearly there is still much more to come from the Brexit, so if you have any short or long term plans to transfer or repatriate Pounds internationally, please highlight your requirement to us today.

For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me at jmw@currencies.co.uk.

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.