This Pound Sterling update will discuss the factors that could affect exchange rates this week including important releases for the UK such as Public Sector Net Borrowing and GDP figures.
Sterling hits its highest level in 3 months vs the Euro during last week’s trading session after an opinion poll showed the Remain camp with the biggest lead so far.
With just less than 5 weeks to go now before the EU referendum is held on 23rd June this was seen as very good news for the British economy and therefore Sterling saw these gains versus the single currency.
The UK government, Bank of England, International Monetary Fund and the European Union itself have all spoken out in favour of the UK remaining part of the EU. On the other side the Leave campaign have been supported by the likes of Boris Johnson, Nigel Farage and Donald Trump. With such huge backing by both individuals and institutions it is hard to see the UK making the decision to leave the European Union but as the vote is democratic the next few weeks are likely to cause uncertainty for Sterling exchange rates against all major currencies.
Earlier this month UK manufacturing as well as industrial production data both came out at their lowest levels for 3 years but Retail Sales provided Sterling with a huge boost when they came out at 4.3% compared to the estimate of 2.5%. This positive data shows that it is not all gloom and doom for the British economy.
This week we see two important releases for Sterling exchange rates including Tuesday’s Public Sector Net Borrowing for April followed by GDP figures on Thursday. Growth is key for an economy and any signs of this coming out lower than expected could cause a fall for the Pound vs all major currencies.
Last month was the first time that the Eurozone outperformed the UK in terms of growth with 0.6% compared to the UK at 0.4%. Therefore if we see the second estimate downgraded this could cause Sterling Euro exchange rates to fall. To keep track of current foreign exchange rates visit our live exchange rates page.
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