The Pound has now fallen by as much as over 2% against the Euro or the difference of £4,350 on a currency transfer of €200,000. The Pound has also plummeted against the US Dollar falling by over 6% in the same time period or the difference of £8,500 on a currency transfer of USD$200,000, which highlights the importance of being kept up to date with regular market movements.
The table below shows the market movements for a number of GBP currency pairings in the last 30 days:
|Currency Pair||% Change||Difference on £200,000|
Last Thursday the Bank of England decided to keep interest rates on hold with a 7-2 split. This did not come as too much of a surprise but the Pound fell following the press conference held by Bank of England governor Mark Carney. The central bank cut its growth forecast to 1.4% after the original forecast back in February which suggested the UK would hit growth of 1.8% during 2018. This caused investors to sell the Pound and we have seen Sterling struggle since.
Prime Minister Theresa May has split her senior team of minister into two different camps in order to try and resolve their differences on the Brexit issue. The main issue is how to sort out the customs deal with the EU. Foreign Secretary Boris Johnson is opposed to May’s option of a ‘customs partnership’. May wants to maintain a problem free border in Ireland but as yet this is still not been cleared up. We are currently just five months away from having a deal concluded in order for it to be ratified by next March. As and when this gets sorted this could help the Pound but for the time-being I think this could cause a problem for Sterling exchange rates.
Tomorrow morning there is a huge amount of economic data which could affect the value of the Pound. The main focus will be on the jobs market in the UK with the unemployment rate as well as average earnings data released at 930am.
UK unemployment has been one of the saving graces in the UK economy over the last few months and with average earnings outpacing inflation last month this was originally one of the justifications to start raising interest rates in the UK.
Therefore, although we did not see a rate hike last Thursday this could provide some support for a rate hike in the future if the data is strong so make sure you keep in close contact with your account manager during tomorrow’s trading session.
The latest UK Inflation Report Hearings will also be announced late tomorrow morning and as the Bank of England are tasked with keeping inflation at the target level of 2% any concerns again could give further support for a positive change in monetary policy in the longer term and this could potentially help the Pound fight back.
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