The Pound has seen an excellent boost higher following better than expected retail sales data for the month of May. The particularly warm weather in May has helped see a surge in spending on the high street after the very cold winter in the UK. Retail sales jumped 1.3% against expectation of just 0.5% resulting in a good jump higher for the Pound. The table below shows the range of exchange rates for a number of currencies during trading on 14.06.2018.
|Currency Pair||% Change||Difference on £200,000|
The Bank of England held off from raising interest rates at the last meeting in May but these stronger figures could help support the view that the central bank may now hike in August with the option very much on the table.
Economic data is light today with the Bank of England Quarterly Bulletin which provides an update on market developments and reports on market developments at home and abroad.
Focus moves to next week’s Bank of England interest rate decision on Thursday. Although no change is expected any clues offered as to whether the next hike could come in August or possibly November are likely to see the pound react. The Bank of England will need to consider whether the strong pick up on the high street sufficiently outweighs the weaker industrial and manufacturing production figures seen earlier in the week.
The pound continues to see a volatile period and remains under considerable pressure following the 15 votes in the House of Commons earlier this week. The government has been able to reverse the amendments that were put forward in the House of Lords including the prospect of staying in the European Economic area (EEA) also known as the Norway option. However, a last-minute concession on having a “meaningful vote” was offered by the Prime Minster to a number of rebel conservatives to gain their support. It has come to light that what was supposedly promised by the Prime Minister appears to be different to what the government is actually prepared to offer and concerns a certain clause 5c which would tie the governments hands from walking away without a deal.
There is likely to be more developments on this issue next week and could create more issues for the Prime Minister and the pound. The bill goes back to the Lords on Monday and the Commons again on Wednesday.
The next EU summit will be held in two weeks’ time on the 28th June and this should be marked in the diary for anyone with a currency transfer to make. The response from the EU on the British proposals is likely to make the pound move and clients would be wise to plan around this event and consider taking the risk out of it.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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