Today's Sterling report looks at the current situation with exchange rates and, during what could be an important week for the Pound, the events that could affect Sterling. The table here displays the difference between the high and low for a number of GBP pair in the last month:

Currency Pair% ChangeDifference on £200,000
GBPEUR2.42%€5,440
GBPUSD6.22%$16,760
GBPAUD4.33%$14,840

Brexit latest: Michel Barnier warns the UK

Speaking outside Downing Street yesterday, Michel Barnier the European Union’s chief negotiator offered a harsh reminder to the UK by stating that trade barriers would be unavoidable if the UK chose to leave the customs union, amid claims of disunity within the Conservative Party.

Theresa May now faces a difficult task of balancing the interests of her party and cabinet whilst remaining under pressure from the public for Theresa May to outlay her plans for what she wants ahead of the next round of negotiations, which are forecasted to be particularly difficult. Michele Barnier said that time was of the essence now to get things accelerated as this round of the negotiations covers some sticking points such as the rights of EU nationals arriving after the referendum back in 2016. I would expect this to be an extremely volatile period for Sterling as we enter the second round of negotiations.

Sterling slips following Services Purchasers Managers Index (PMI) report

Sterling slips following Services Purchasers Managers Index (PMI) report

Yesterday the Pound took a fairly large hit following a weaker than expected reading on from the services report. Januarys’ services report showed a 16-month low yesterday, with most service sector firms citing Brexit-related uncertainty as a key factor for clients not choosing to spend. Service based industry makes up around 80% of the UK’s economy, which is why today’s release had such an impact on Sterling.

Today’s slip meant that the composite PMI for the UK fell to 53.9 from 54.9 from December due to the recent fall in confidence in the manufacturing sector and construction surveys. Analysts have now started to question the future growth of the UK economy.

The week ahead: Bank of England Monetary Policy Committee Meeting

This week’s main focus will be the UK’s Bank of England MPC meeting and inflationary report hearing scheduled for Thursday. Whilst the event itself isn’t scheduled to bring any fireworks, the later hearing could. In BoE Governor Mark Carney’s last appearance he commented that the UK was preparing to upgrade its forecasts following a pick up in the global economy and the UK’s economy.

Any positive tones in his speech could provide Sterling with a very welcomed boost amidst the political uncertainty at present and shouldn’t be overlooked by any clients looking to buy currency with Sterling this week.

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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.