The Pound has found some support against both the EUR & USD during the early part of the trading week but as of yet, has failed to make any significant inroads against either currency. The Sterling report below covers some of the reasoning behind this, and the economic and political factors coming out this week. The table below shows the change for a number of GBP currency pairs, to demonstrate the importance of timing your transfer and how this can affect your return for £200,000.00 during the high and low points of the past month.

Currency Pair% ChangeDifference on £200,000
GBP/EUR1.3%€3,100
GBP/USD2.5%$6,780
GBP/AUD2.3%AUD $8,400

It’s been a difficult time for the UK economy of late, with Brexit firmly back in the spotlight and investor confidence in the Pound seemingly ebbing lower at every significant juncture.

GBP/EUR rates are trading back above 1.13 but these are still some of the lowest levels seen since March. Whilst the Pound has found plenty of support above 1.30 against the Greenback, it continues to find a huge amount of resistance around the 1.32 threshold.

Sterling is faring better against the commodity-based currencies but this is likely due to investors’ concerns over the escalating trade-war between the US, China and the EU. With Mexico & Canada now being dragged into proceedings, I expect this potentially explosive situation to have a significant impact on the markets and the aforementioned currencies values over the coming weeks.

Chancellors Budget Today

Is Sterling’s value likely to increase and what are the key triggers to look out for this week? 

Sterling’s current value and short-term forecasting remains something of an enigma at present. It received a welcomed boost following better than expected UK Services data released yesterday morning (the official figure was 55.1) but isn’t threatening to make any significant move against its two most traded currencies, the EUR or USD.

It’s long-term value is going to be inextricably linked to the UK’s economic position post Brexit and if recent reports are to be believed, it seems as  though UK Prime Minster Theresa May is angling for as softer-Brexit as possible.

ITV journalist Robert Preston has indicated that the government’s ultimate aim is to remain in the Custom’s Union is some form, as this is the only way of avoiding border checks between the Republic & Northern Ireland.

Whilst this will anger many MP’s, including many in her own Conservative party, it may well help to alleviate some of the pressure on the Pound, as investors will likely look at the long-term outcome of the UK in a far more favourable light.

Those clients with a Sterling currency conversion to execute over the coming days should be keeping a close eye on today’s speech by Bank of England (BoE) Governor Mark Carney. With UK economic data improving slightly of late, it will be interesting to note whether he alludes to any potential interest rate hike over the next couple of months. Whilst he is likely to remain cautious over Brexit, a positive tone during his speech could help support Sterling’s value as we head towards the weekend.

Friday of course will be key, with all eyes firmly fixed on the Chequers Cabinet meeting. This has been well reported in our previous reports this week but has the potential to have a huge impact on Sterling’s value, with key topics such as trade relationships and the Irish border options likely to be discussed in detail.

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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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.