It has been a difficult week for Sterling having struggled to maintain the gains it made following the US Fed rate hike decision last Wednesday. The thinner trading levels and limited economic data, courtesy of the festive period, has left GBP particularly exposed to news breaking out of the political arena. The Pound was flying high at 1.27 against the US Dollar and was threatening to break through the 1.20 mark against the Euro but has since dropped by around 3.2 % and 1.25% respectively against its two major counterparts.
With the Supreme court decision looming closer, it seems every opinionated jibe resonating out of leading businesses and politicians alike are impacting Sterling’s value on a daily basis.
Scotland’s first minister Nicola Sturgeon’s recent push for the UK to remain in the single market, bringing up the possibility of a second Scottish referendum, has added further pressure on Theresa May to clarify her plans in the new year.
Yesterday the UK’s market leader in economic surveys CBI reiterated the importance of British businesses being given barrier free access to European markets, warning a “cliff edge break” could be detrimental to a number of growing and leading sectors for the UK economy.
Sterling buyers may well be wise to take advantage of the instant impact these releases are having on the strength of the Pound. Why not get in touch with your account manager who can help you take the stress out of the transfer whilst maximising your returns, so you can make the most of the festivities ahead.
Despite the short term negativity, there have been a few data releases this week that reinforces Sterling’s strength for 2017.
The office of National statistics released the UK’s latest borrowing figures which fell once more to £12.6bn for November which is just about in line (despite being higher than expected) with the government’s deficit forecast projected in Chancellor Philip Hammond’s Autumn statement.
There have also been signs of a recovery in investment, with Lloyd’s Bank recently confirming its recent purchase of card issuer MBNA for £1.9bn, its first major acquisition since the financial crisis.
This coupled with the stronger than expected UK retail sales figures released earlier on in the week offer a slightly positive outlook for the UK economy going forward.
Sterling sellers would be well advised to keep a close eye on the UK GDP predictions released tomorrow morning offering a great insight into the growth and the optimism within the economy as we step closer to the New Year.
Do you have a currency exchange requirement and would like to know more about what drives exchange rates? Our team of knowledgeable brokers are available throughout the Christmas season to answer any of your questions on 01494 725 353 or by emailing me at firstname.lastname@example.org.
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