Having started the week at multi-year lows against the Euro and the USD, the Pound has started to show signs of stability over the course of this week. On Tuesday, inflation figures for the UK economy showed signs of gradual improvement, with consumer prices rising to their highest levels since the referendum result. I believe that one of the main drivers behind this was the Bank of England’s interest rate cut in August this year, which was used as a way of softening the effect of Brexit uncertainty on the economy and helping the Bank achieve their target inflation level of 2%.
Despite these more positive steps for the economy and the Pound, we did see Sterling struggle yet again during yesterday’s trading following a drop in retail sales figures for September. Warm weather has been highlighted as the main factor in the fall, with clothes sales taking a hit, but I feel that Brexit uncertainty and inflation may also have been influential on consumer’s spending decisions. As prices continue to rise, we may see retail sales continue to struggle in the coming months, and although the Unilever dispute with Tesco over pricing is now resolved, I believe that we haven’t hear the last of price wars between Supermarkets and their overseas suppliers going forward.
This is likely to harm the Pound and therefore highlights the importance of keeping in regular contact with your broker here to keep you one step ahead of any volatile market movement.
Theresa May is currently in Brussels for her first EU summit as Prime Minister and her comments may help strengthen the Pound and remove some of the uncertainty over the UK’s relationship with Europe in the aftermath of Brexit. She has been keen to stress the importance of a strong relationship between the UK and EU, stating Im here with a clear message. The UK is leaving the EU, but we will continue to play a full role until we leave and we will be a strong and dependable partner after we have left.” Those with a Sterling requirement should keep a close eye on any comments from the summit later on this afternoon as they could give some hints towards where the UK’s relationship with the EU is heading and are therefore likely to impact on the value of the Pound.
Looking further ahead to next week, and the most influential data release for GBP is likely to be GDP figures for Q3 of this year. These are only Preliminary figures, but this quarter of 2016 will be looked at under particular scrutiny since it is the first to follow the referendum result. If there are any signs of uncertainty or a fall in economic output, then I believe we could see the Pound under increased pressure.
For more information on how future data releases could affect your currency exchange, call our trading floor on 01494 725 353 or email me directly at email@example.com.
First class foreign currency provider, great rates and outstanding customer service.
Great service very professional but with a personal touch. Everything went smoothly with no fuss. Would highly recommend.
It was really refreshing to go through a process that had absolutely no hiccups at all, the service that we were offered exceeded our expectations. We would unreservedly recommend the company to anyone seeking to exchange currency.
Very efficient service. I’ve never used a service like this before & was purchasing a house in France. It was all explained very well & I was kept informed all along the process. Putting a deposit down to pre-book the rate also saved us a fortune.