This Pound Sterling report looks at what's next for the Pound, discussing factors that could affect GBP exchange rates this week. The below table shows the market movements for a number of GBP currency pairings in the last week:
|Currency Pair||% Change||Difference on £200,000|
Sterling remained under pressure yesterday following a surprise drop in inflation on Tuesday down to 2.6% from 2.9% the previous month.
Markets were expecting inflation to remain largely unchanged from the previous month, however the drop in oil prices during June (Brent Oil dropped to $40 per barrel) fed through to consumers.
The reason for the Pound's slump in value was that the chances of the UK raising interest rates at their next policy meeting faded with this data release.
The Bank of England had been under pressure of late to raise interest rates in an attempt to try and slow inflation as passed the target rate of 2%.
I personally think that the Pound's recent surge may have reached an abrupt end. I think that the Pound is now in a vulnerable position and could be set to decline further as Brexit negotiations heat up.
With the pressure on the Bank of England to raise interest rates on the back burner for now, I feel that attention must now be focused again on Brexit and trying to minimise any negative effects that negotiations could have on the Pound.
Many analysts are now claiming that the negative effects of Sterling’s drop off following Brexit has now been fully passed on to the consumer now in terms of prices of goods and services.
Today we have Retail Sales data for investors to digest. The latest Retail Sales data is expected to show a healthy gain and if this does occur I wouldn’t be surprised to see a brief spike in Sterling’s favour. This could be a volatile data release as the continued squeeze on household incomes following higher prices and a slump in the wage growth of late poses a real risk of making the predicted healthy gain turn ugly very quickly.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353.
Easy, friendly and hassle free. I’ve used many times over nearly 10 years, and always a simple transaction. Can’t recommend enough.
Great, fast, friendly service. Best rates.
We found our experience with Foreign Currency Direct very easy. The person dealing with our transaction was very helpful and friendly. We would definitely recommend them.