This update discusses the recent political events that have suppressed the Pound and looks at the likelihood for a UK interest rate rise in 2017. The table here shows the market movements for a number of Sterling currency pairs in the last 30 days:
|Currency Pair||% Change||Difference on £200,000|
With Prime Minister Theresa May still trying to get all of her cards in line and everything settled after last month’s roller-coaster election battle, we are still not much clearer on what kind of future lies ahead for the current Government, and what kind of role the DUP party will play in future Brexit negotiations. In my opinion this is what is hampering Sterling’s advances and keeping the GBP/EUR rate down at the late 1.139 level.
We are now at the start of two years of hard Brexit negotiations, with our hand in my opinion being very much weakened by our political unrest and so much uncertainty surrounding our Government.
I feel this weakens our position and makes trade deals and sensitive issues that need to be addressed more difficult to agree on.
All of this is bound to add further pressure to an already sensitive GBP rate and I feel the days of Sterling to Euro exchange rates at 1.20 could be a long way off.
At last month’s BoE meeting the board voted by 5-3 not to raise interest rates and keep the current rate 0.25%. If there is any further sign over the coming weeks that the BoE are considering lifting interest rates this could provide Sterling with a jab in the arm it needs and we may well see a spike in the market. In my opinion I do not think we will see any further rate hikes in 2017. I would strongly recommend anybody with a Sterling to Euro transfer to complete get in touch with their account manager to discuss your future options. You can get in touch with our trading floor for a free, no obligation chat on 01494 725353.
On Thursday afternoon we have the NIESR (National Institute for Economic and Social Research) growth estimates, this will give investors an insight into current market sentiment and future growth, and if these figures are perceived as positive by the markets we may well see sterling spike tomorrow afternoon.
For more information on how future data releases could affect your currency requirement please call our trading floor on 01494 725 353.
Fantastic! Money transferred Friday afternoon from my UK account and in my Spanish account same day. Couldnt believe it!
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