This Pound Sterling report will discuss factors that are likely to affect GBP exchange rates this week and in the run up to the EU Referendum.

How will the EU Referendum effect your trade?

The Pound has dropped as low as 1.23 against the Euro during the build up to the referendum. The uncertainty surrounding whether the UK will remain in the EU or leave is wreaking havoc on the currency market. The days of 1.42 in December are well and truly behind us.

A recent survey from whatukthinks.org/eu/ that is based on the latest average of six polls shows it neck and neck at 50% each.

I think we are now starting to see a dip in UK figures due to the referendum. With many businesses reluctant to move, not knowing which way the vote will go. If I had to put my neck on the line I think the UK will remain in the EU. I think there are far too many uncertainties with a vote to leave whereas the Remain campaign is largely based on fact. I think this will become more apparent as we draw closer to 23rd June.

Key data releases today

At 08.30 this morning we will see the release of Producer Price Index (PPI) data. PPI is a measurement of inflation experienced in UK manufacturing when buying goods and services. Consumer Price Index (CPI) figures are also released at 08.30 and this is a measurement of inflation in the retail sector. Inflation gives a clear indication as to the health of the economy. I expect to see a drop in both data releases so expect Sterling to lose value. Thursday at 08.30 we have Retails sales data and I again I would expect a drop. If you have to move short term it may be wise to move quickly.

Thank you for reading today’s market report for Sterling, I would greatly appreciate any feedback you have and would take pleasure in replying personally. I am more than happy to assist you with any of your currency requirements. Feel free to e-mail me at dcj@currencies.co.uk.

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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.