This report will look at the expectations for Pound Sterling exchange rates this week in order to help you stay informed if you need to make a currency transfer. The table below shows the difference you would have received when buying £200,000 at the high compared to the low over the last 30 days. For current live exchange rates click here.

Currency Pair% ChangeDifference on £200,000
GBPEUR3.1%€7,150
GBPUSD2.1%$5,450
GBPNZD2.8%NZD $10,240
Poor UK Retail Sales cause the Pound to fall

Poor UK Retail Sales cause the Pound to fall

The Pound vs the Euro has now hit its lowest level in a month after the UK announced a sharp drop in Retail Sales data during yesterday’s trading session.

After seeing a rise in August the figures fell by 0.8% during September and this is now the lowest quarter since the second quarter of 2013.

On Tuesday UK inflation showed its highest level in over 5 years which has put more pressure on the Bank of England to think about raising interest rates. However, on Wednesday although UK unemployment showed its best level in over 30 years the real issue for me is Average Earnings which came out at 2.1%.

If you’re in the process of buying a house on the continent and concerned about what may happen to the value of the Pound it may be worth looking at buying a forward contract which allows you to secure a rate for a future date for a small deposit.

Bank of England – Will they or won’t they raise rates?

One of the main responsibilities of the Bank of England is to control inflation and as the target is set at 2% the rise is concerning. Therefore, this is the reason why there is a 75% chance of a rate hike occurring when the central bank meets on 2nd November.

However, the secondary responsibility for the Bank of England is to ensure economic growth so if a rate hike occurs then this could potentially cause a problem for the cost of living. The cost of borrowing will rise as will mortgages so this could be a justification of the Bank of England not cutting rates in less than a fortnight.

Clearly there is a lot of uncertainty at the moment concerning whether or not the Bank of England will or won’t move interest rates so make sure you keep in close contact with your account manager who will keep you updated with what is happening in the markets.

Indeed, since the start of the week the Pound has fallen by 1.5% vs the Euro which is the difference of £2,700 on a €200,000 currency transfer. The Pound has also fallen by 1.4% vs the US Dollar which is the difference of £2,100 on a Dollar purchase of USD$200,000.

The Pound could climb to end the week

Pound expectations for the week ahead

The next real catalyst for change in terms of economic data will come in the middle of next week when the first estimate of UK GDP figures are due to be released on Wednesday for the third quarter.

This will be closely followed by Inflation Report Hearings and I think this will give us further insight as to what will happen on November 2nd with interest rates.

The general theory is that if interest rates are increased the currency involved would typically strengthen. However, owing to the problems with average earnings and the Brexit uncertainty we may not see the gains that some expect.

For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me directly at teh@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.