This Pound Sterling rate forecast discusses the reasons for the spike we have seen for the Pound, as well as the factors that could affect exchange rates this week.
For current exchange rates visit our live foreign exchange rates page.
Over the last 7 days Sterling rates have rallied against a basket of currencies, even against the backdrop of poor economic data. Last week we saw releases of poor import/export figures and a cut in growth forecasts by the Bank of England, all adding to the uncertainty on the future of the UK as part of the EU; developments in the EU referendum debate remain the primary influencer on the value of the UK Pound.
Yesterday we saw Sterling’s exchange rate spike with gains of over 1.5% against most currencies. This gain was as a result of unemployment data in the UK showing a slight improvement but a majority of the gains were as a direct result of a change in the polls and odds on the results of the referendum. The majority of book makers, which have a lot more influence in comparison to the polls, cut their odds for the UK to remain in the EU, from 1-3 to 1-5.
Polls results also changed and now stand with the ‘remain’ campaign rising to 47% while the ‘leave’ campaign is trailing at 39%. This change was reportedly after an array of updates from the Leave party which has resulted in a loss of confidence in their campaign and investors were inclined to buy back the Pound with hopes the UK will stay in the EU.
There is certainly an opportunity at the moment as buying Euros is at the best levels since the beginning of February and the best rates for buying US Dollars seen since the beginning of the year.
The UK unemployment figures released yesterday confirmed a short fall. Unemployment is now standing at 1.69 million and the jobless figure stands at 5.1%. The number of people employed has now hit a new record high of 74.4%.
Unemployment is an integral part of the interest rate change policy confirmed by the Bank of England and as a result is keenly watched by markets. I am personally still a little concerned, with other areas in the economy reporting a softening in activity in the months ahead I would not be surprised if we see this reflected in the Unemployment figures in the coming months.
Moving forward it seems highly likely that the speculators will take profits this morning so I expect the heat to come off the value of the Pound and for prices to fall. As a result if you want to take advantage of this SPIKE I would strongly suggest you get in contact sooner rather than later.
At 9:30 today we see the latest Retail figures for the UK, these is expected to show a slight fall which would again traditionally result in Sterling weakness. However, changes in the EU referendum are overshadowing everything at the moment so make sure to register for live updates and spike notifications now if you are in the market over the next 6 weeks.
For more news what could affect exchange rates and your currency transfer, call our trading floor on 01494 725 353 or email me directly with any questions at email@example.com.
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