With the currency markets moving every two seconds, it can be vitally important to be aware of what is driving the currencies in or out of your favour. You can keep track of live exchange rates here. The table below shows the movement in the last 20 days for a number of currency pairs and the difference in value between the high and the low when converting £200,000.

Currency Pair% ChangeDifference on £200,000
GBPEUR2.4%€5,600
GBPUSD2.1%US $5,800
GBPCAD2.9%CA $3,000

Test number 1: How fast can Brexit talks progress?

It has been a steady start to the week for sterling, having managed to protect last week’s gains against its major currency counterparts, rising by 0.65% against the Euro and 0.67% against the Dollar.

The strong increase suggests the markets responded positively to news the UK and the EU plan to accelerate Brexit talks, with 3 rounds of negotiation now booked before the end of the year. The next set for the 16th of November.

Yesterday’s movement shows just how politically driven Sterling exchange rates are at present, with Brexit talks being 1 of 3 key factors for sterling strength I can see throughout November.

White Paper Release

Test number 2: How will a potential interest rate hike hit the Pound?

The markets favouritism for the Pound since September stems from the general consensus that the bank of England will have to raise interest rates this Thursday to choke the supply of money into the economy, in a bid to curb inflation.

If the BoE go ahead the Pound could strengthen further as the higher returns on investment for Sterling holders should attract attention. However, as this has long been expected, most of the gains have probably been priced in. If you are looking to buy foreign currency with Sterling, it may pay to plan before the release, just in case we get a shock.

This morning’s manufacturing data released a 09:30am may provide a couple of last minute clues before tomorrow’s rate decision. If you want to maximise your returns it may pay to get in touch with your account manager to plan around this.

Test number 3: The Chancellor’s budget on the 22nd

Although it could provide a good boost for the Pound short term, an interest rate hike could add to an equally pressing matter for the UK economy, leaving investors to tread cautiously around the Pound of late: Will the rising costs of living in the UK and stagnant average earnings prompt a decline in the growth?

It adds further impetus on Philip Hammond’s November budget, who may well be forced to re-evaluate his ambitions of eliminating the UK’s public deficit by 2025. The target was certainly well received back in march when the spring budget arguable ignited a 2% drive from the Pound against the Euro.

Given the circumstances however, the Institute for Fiscal studies have urged the government to consider freezing taxes in the coming budget. Given Average earnings have fallen for the first time in 3 years, it’s an understandable suggestion. I wouldn’t be surprised if this sways investor appetite for the Pound and can certainly see sterling’s value fall as the month goes on.

For more information on how future data releases could affect your currency requirement, call our team of experienced currency brokers on +44 (0)1494 725353.

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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.