There will be further insight into the Brexit fallout situation as early GDP figures for the quarter are revealed this morning. If the GDP figure is better than expected I believe Sterling could gain well over a cent on the Euro. There has been major apprehension on what the data will say after the vote to leave the EU and even if not positive the certainty of having facts may help Sterling.
There was positive news from the Confederation of British Industry yesterday who revealed there August Distributive Trade Surveys. The survey provides insight into businesses that provide distribution for retail and wholesale companies. The data suggested that executives believe the short term trends are positive and they have opportunities. If the likes of logistics companies indicated a slowdown that could suggest there was quieter months ahead.
Keep track of exchange rates here.
Some Economists believe that next year the inflation levels could rise above 3% causing a pinch on the average household. The cost of goods would move considerably above real wage growth which is only expected to rise by 1%. Whilst 3% is the top of expectations the Bank of England believe 2.3% is more realistic. However high inflation is likely to encourage more households to save and could increase the unemployment rate.
Sterling looks unlikely to gain massive momentum from UK data and most of the spikes I believe will come from negative data from other currencies. Personally though I believe that as more information becomes available in the coming months and there is less unknowns, Sterling will begin to strengthen towards the end of the year.
Todays GDP figures has the potential to cause further volatility for Sterling, you may want to get in touch with us ahead of the event on 01494 725 353.
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