With Sterling exchange rates currently driven by Brexit news, today could be an interesting day, with the start of a series of Brexit speeches from Cabinet members. This report looks at the potential effects of Boris Johnson's speech and other events that could impact rates this week.

The below table shows the market movements for a number of currency pairings in the last month:

Currency Pair% ChangeDifference on £200,000
GBPEUR2.42%€5,480 EUR
GBPUSD5.63%$15,520 USD
GBPAUD4.53%$15,460 AUD
PM avoids Tory rebellion after victory over EU withdrawal bill

Will it be a Boris bounce or a Boris bungle?

The Pound could be in the spotlight today as Boris Johnson gives a key speech on Brexit outlining a vision to unite both the Leave and Remain camp. Whilst sanctioned by No. 10, it is no secret of Boris’ political ambition for both that famous front door and also a hard Brexit. This speech is certainly something to be aware of if you are considering a currency purchase or sale involving the Pound.

With no real concrete progress on Brexit since December the market and analysts are back to familiar ground of debating the potential outcomes from the situation. If you have a transfer buying or selling the Pound it is important to highlight your position so our expert and knowledgeable team can alert you to any opportunity or risks.

Headlines surrounding Brexit progress or lack of, continue to be made and will surely act as a driver, today’s speech and the ones coming up could be very important in my opinion.

What economic news will move the Pound this week?

Inflation data yesterday showed a small rise to 3% from the 2.9% and predicted and shows Consumers and the Bank of England still have plenty think about. May now appears to be the favourite bet on when the UK will next hike interest rates, with a gradual increment to 0.75% being pencilled in by economists. Clients holding sterling expecting the Pound to rise dramatically between now and then could be disappointed as this news looks to be largely priced in, hence sterling’s recent rise against most currencies.

The next key economic news is Friday’s Retail Sales which could give us a small lift. Earlier this week VISA released overall consumer spending figures which were poor. They highlighted a decline in overall consumer spending for the first time in 5 years. Could this be a reflection of higher inflation squeezing shopper’s spending ability? In such a scenario is it right for the Bank of England to raise rates which could further stifle spending and potentially derail growth?

The UK economy is largely driven by consumer behaviour so the answers to these questions will become more apparent on Friday and there is real scope for volatility on the Pound as the market reacts.

BoE governor Mark Carney’s tried to remain optimistic about the UK economy

The best Sterling strategy and approach?

Whilst we have had some snippets of information on Brexit the real juicy pieces of news come later this year with firm decisions and debate on the transition and trade talks. Until then sterling is remaining fairly range bound and clients buying or selling the Pound should be very conscious of events affecting the respective currency pair they are concerned with.

For example, we have recently touched post Referendum highs on the Australian dollar and Canadian dollar with the Pound, however we are 5 cents above the post Referendum lows on the Euro. Understanding the key news on the currency pair you trade is vital to making the best decisions on how to plan any transfer.

Here at FCD our team of knowledgeable traders can provide information and insight into the market top help you make an informed choice about any strategy or approach to help make the most of your funds. To learn more call our trading floor on 01494 725 353 or email me 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.