This Pound Sterling report discusses the current situation for GBP and the factors that could affect exchange rates this week. The table below shows the difference you would have received when buying £200,000 at the high compared to the low yesterday:
|Currency Pair||% Change||Difference on £200,000|
The Pound started the week on the back foot following reports that all is not well within the UK government. Sterling fell by nearly 0.5% in yesterday’s early morning trading, after the Sunday Times reported that 40 conservative MP’s agreed to sign a letter of no confidence in Prime Minister, Theresa May. This was only 8 short from the 48 needed to force a new leadership into play and this speculation only adds to further unclarity on the UK’s Brexit position and has resulted in Sterling weakness.
Further pressure was heaped on to Prime Minister Theresa May in the afternoon yesterday as UK business leaders pressed for a transitional deal to be finalised before Christmas, and that a ‘no deal’ situation would seriously harm the UK economy and the Pound's value should this occur.
Any clients holding Sterling looking to buy foreign currency should keep this mind, and note that there a number of options available to you should you want to take the volatility out of your trade.
Perhaps the biggest story of Brexit so far, yesterday Minister David Davis told Parliament that any Brexit deal, whether it be transitional or not would have to become a law, and before any law is passed Parliament would have their say and their chance to make amendments.
Many analysts are so far seeing this as the UK Government having no other option but to go for a soft Brexit with the approval of others, with the Labour camp calling it a ‘significant climbdown’. A softer Brexit has thus far been positive for the Pound.
Things aren’t about to slow down in the UK anytime soon. This week is a busy one for Sterling, with a number of key data releases still expected. Despite the political situation in the UK seemingly harming the Pound's value, economically the outlook is more positive. The manufacturing sector in the UK is particularly strong following a pickup in global trade and a fall in the Pound's value. This has resulted in an upward revision of GDP from the National Institute of Economic and Social Research (NIESR) and will be interesting to see if this is correct when the official figures are released on the 28th of this month.
Closer to home, today the latest raft of inflation data will be closely watched. The expected rise in inflation will take the levels to 3.2% and would mean that Mark Carney, Governor of the Bank of England would have to write an open letter to the Chancellor of the Exchequer to explain why this is happening and how the monetary policy committee plan on curbing the rise. This could potentially give an insight into the rate hike path in the UK and could help strengthen Sterling in the long term.
On top of this, labour market data will be released tomorrow and retail sales data will be released on Thursday, make sure to keep in contact with your trader to make sure you are up to date with the Pound's movements.
For more details on upcoming economic releases that could affect your currency exchange call our currency brokers on 01494 725 353.
All the staff I spoke with were helpful ,courteous and knowledgeable. The service is efficient and FCD make the exchange process hassle free.
Personal, attentive. What more can I say? First Rate.
Efficient, friendly, personable – I have used this service several times and will not hesitate to call on them the next time a foreign currency transfer is required.
Quick, competent and friendly: a reassuring excellence of service, which I heartily recommend to every potential client.