This Pound Sterling update discusses positive news on Brexit progress, as well as some key data releases for this week and next month's UK interest rate decision. This table shows the market movements for a number of GBP currency pairings over the last month:

Currency Pair% ChangeDifference on £200,000
GBPEUR3.12%€3,480 EUR
GBPUSD3.92%$10,240 USD
GBPCAD2.52%$8,260 CAD
Parliamentary Brexit Vote – The True Test for Brexit Deal

Brexit optimism and interest rate hike key for Pound

Sterling enters this week on a positive note with Theresa May making some headway over Brexit at the EU Summit. Whilst finer details of a settlement bill, rights and the Irish border remain to be finalised, agreement to start preliminary discussions of trade for phase 2 is positive for the Pound. With assumption that these issues can all be resolved in time we avoid the ‘no deal’ scenario which has been holding Sterling back lately. This is presenting some excellent short term opportunities to buy a foreign currency with Sterling that might not last.

If you are looking to buy or sell the Pound this is the main news to look out for since it will likely have a direct effect on the Bank of England decision to raise or not raise interest rates next week.

The main news this week for Sterling is UK Gross Domestic Product (GDP) data on Wednesday at 09:30 am. With the UK economy growing at 0.3% making it one of the worst performing major economies at present, bad news would not be surprising. If you need to buy or sell the Pound this spike might not last, speak to your account manager to track the latest developments.

Bank of England's main concerns is that consumers will be able to keep up their spending

Will the Bank of England raise interest rates?

Whilst it does appear the Bank of England will more than likely raise interest rates that does not automatically mean the Pound will strengthen. I personally feel that we will either see no hike or such a tentative one Sterling will suffer, I think any strength is priced in. If buying a foreign currency with the Pound pinning hopes on that expectation could prove very costly as other factors weigh on Sterling and the possibility of a hike. For example 5 million households in the UK are on a variable mortgage and if rates go up this will lead to an extra £1bn in mortgage payments. Retail sales data last week disappointed and if consumers are reining in spending, raising interest rates, particularly with growth so meagre could cause more problems than it solves.

Overall the Pound is much better supported on the prospect of a rate hike but with strong evidence also to the contrary, the Pound could very easily lose ground if the Bank of England is not upbeat in its assessments next week.

Clients buying a foreign currency with the Pound should I feel, be very cautious about gambling on rates improving dramatically. It seems every time the Pound starts to make a recovery and the tide has turned, some fresh piece of news crops up and it is swiftly knocked back down. Make sure you highlight any Sterling requirements to our expert team.

For further information on how future data releases could affect your currency requirement please do feel free to contact me, or any of our currency brokers on 01494 725 353. Alternatively, you can email me directly at


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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.