This GBP report will examine the factors that could affect Pound Sterling exchange rates this week in order to help you stay informed if you need to make a currency transfer. The table below shows the difference you would have received when buying £200,000 at the high compared to the low during the last month. For current exchange rates visit our live foreign rates page.

Currency Pair% ChangeDifference on £200,000
GBP/EUR2.6%€5,800
GBP/USD1.8%$4,860
GBP/AUD1.7%AUD $5,780
Brexit back in focus

Sterling overview – What next for the Pound?

Sterling’s decline has cooled over recent days, with the Pound finding a foothold against a basket of major currencies, including the EUR, USD & AUD.

However, any client’s expecting a major upturn in the short-term may well be left disappointed. As such, those looking to sell their Sterling positions may wish to consider the recent upturn as a window of opportunity, in an increasingly unpredictable market. Despite a slight upturn last week, the Pound remains under pressure due to the rising concern regarding the UK’s long-term economic standing. Any sustained rise in the Pound’s value would most likely need to be facilitated by a complete shift in market sentiment and investor confidence.

Talk of Brexit is becoming monotonous but the truth is, it is likely to drive the markets and investors focus for months if not years to come. Any major improvement for Sterling will require a major shift in perception, a scenario that seems unlikely when you consider the current media stance on negotiations.

Over the past few weeks there has been multiple reports regarding a dis-jointed approach, a negotiating team that is out of its depth and a deep concern about how the UK will actually facilitate its exit from the EU.

Whilst it is difficult to know exactly how negotiations are actually developing, it is safe to assume that the UK & EU are struggling to find much common ground. The knock-on effect of this is that investor confidence is drained and the Pound is likely to remain fairly weak as a result.

Personally, I believe any spikes in the Sterling’s value should be considered as an opportunity. It is unlikely that a major increase will occur until we have some solid information, regarding which direction the UK economy is likely to take over the coming months.

Economists believe interest rates likely to be on hold until 2019

A group of economists have dampened market expectation that the Bank of England (BoE) will be raising interest rates any time soon.

This report comes despite comments made last week by a Monetary Policy Committee (MPC) member, who felt that a “modest rise” in rates was needed to help curb high inflation.

Personally, I did not feel a rate hike was likely whilst Brexit negotiations were on-going and this may well be the case, despite inflation remaining well above the government’s target of 2%.

Due to the uncertainty surrounding the UK economy and which direction it will take over the coming months, the central bank will more than likely proceed with relative caution and not look to change economic conditions aggressively inside the UK.

This news could further sap investor confidence in the Pound, meaning the current foothold could be weakened over the coming days as investors digest the news and its potential outcomes.

For the Pound to really move forward I feel it is essential that the Brexit white papers give the markets a stronger indication of what the governments aims are and how they intend to boost the UK economy, whilst negotiating our separation from the EU.

We have reached a juncture where bad news is almost better than no news and as such, any confirmation of progress or the governments anticipated goals, could help bring some market confidence back and perhaps ease some of the pressure on Sterling.

For further news on upcoming events that could affect a currency transfer please call our currency brokers on 01494 725 353 or email me directly here.

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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.