This Pound Sterling outlook looks at factors that could affect GBP exchange rates in the coming weeks. This table shows the movements for a number of GBP currency pairings in the last 30 days:

Currency Pair% ChangeDifference on £200,000
GBP/EUR2.7%€6,000
GBP/USD2.1%$5,600
GBP/CAD3.4%CAD $11,600
Sterling continues to drop further

Sterling continues to drop further

Sterling has continued to fall last week as we finished the week down in the low 1.09 region, this is almost 10 month low within the markets and is certainly not filling those with a GBP/EUR requirement with any confidence.

With Brexit talks now underway again and the Eurozone standing firm on their decision not to make any trade deals official until our “divorce bill” has been paid, the Pound has continued to slid further, and with no really big market movements expected over the coming weeks due to the holiday season coming to an end, Sterling could be set to stay at these kind of lack-lustre levels certainly over the next few weeks to come. I would recommend anybody with a GBP/EUR requirement to be in contact with their account manager here as soon as possible to discuss the options available to you.

Interest rate hike unlikely

Tomorrow we have a very important inflation figures report which is due out at 10am. It is thought that the figures are expected to come in around last month’s previous levels, which in turn will have a knock on affect for any potential interest rate move. At last month’s interest rate decision meeting members voted 6-2 in favour of keeping interest rates at the current levels of 0.25%.

Since this decision was made inflation levels do not seem to have moved further and I personally feel we will not see any rate hikes for the remainder of 2017. Generally if we see an interest rate hike it is perceived as positive for the currency involved. This could be another reason as to why Sterling is performing so badly against the Euro.

Reasons for selling Sterling

The Pound could lose further value before we see any recovery, UK economic uncertainty is likely to drive market sentiment and investor confidence and as such I would look to protect the current value, as it is hard to see where a sustainable upturn will come from. In my opinion we really do not have much light at the end of the tunnel and I feel over the coming days and weeks ahead we could see the rate drop as low at 1.05.

Economic data releases

This week we have a raft of economic data in the shape of the inflation report on Tuesday morning. We also have consumer inflation expectations on Friday morning at 8:30. Any shift in the expected data releases in terms of the figures increasing or decreasing could see rate movement. Please do get in contact with your account manager here at FCD to ensure you have all angles covered. You can contact any of our currency brokers on +44 1494 725353.

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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.