Pound Sterling received a much welcomed boost during yesterday’s trading. Official retail sales figures, which measures the activity of the consumer on the high street, showed a surprise increase despite analysts predicting a decrease in the number. More on the latest economic data release and the potential impact on UK interest rates in the market report below. We've shown the range of exchange rates for a number of currencies during the past week in the table that follows, with the potential returns available when selling £200,000.00 during the high and low trading points.
|Currency Pair||% Change||Difference on £200,000|
Yesterday’s data release showed that retail sales figures rose by 0.3% for August, massively outperforming the expectation of -0.2% contraction set by analysts. The UK economy is currently preforming ‘above trend’ and has led to Sterling having an extremely positive run in September. In fact Sterling yesterday registered 2 month highs against the Euro and the Dollar, highlighting the opportunity for clients looking at buying foreign currency with Sterling at present.
Currently the pound is running on a high and in my opinion will only be strengthened further depending on the outcome of Brexit developments. The recent surge in the Pound’s value has been based on rumours that the Bank of England may have to raise interest rates again if inflation continues to rise. On Wednesday, inflation data hit an unexpected 6 month high and also showed that wage growth had started to pick up too. The reason this data has caused Sterling to strengthen so significantly is that a strong retail sales figure seen yesterday is likely to push the inflation level beyond the Bank of England’s target level and could therefore mean higher interest rates.
Despite the UK economy performing well, the major stumbling block as to the Pound’s value is Brexit. Yesterday didn’t end on a positive note at an unofficial EU summit in Salzburg, after Head of the EU commission Donald Tusk insisted that Prime Minister Theresa May’s Brexit plan ‘won’t work’. This did reverse some of Sterling’s gains in late afternoon’s trading.
UK politics hangs in the balance currently over Theresa May’s chequers plan, which will likely cause Sterling to enter a period of extended volatility if she doesn’t start to gain support of her plan. With little data out today, I would expect political commentary to influence Sterling’s value.
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.
It was efficient, felt very secure with the checks made along the line and a very good rate of exchange.
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Very good. Very efficient. Excellent rate.