This Pound Sterling report looks at the reaction following Theresa May's speech and factors that could affect GBP exchange rates in the coming weeks. This table shows the market movements for a number of GBP currency pairings in the last month:
|Currency Pair||% Change||Difference on £200,000|
Theresa May spoke yesterday at the Conservative Party’s annual conference in Manchester, which resulted in much embarrassment for the Prime Minister, who suffered from continuous coughing fits throughout the hour long presentation, letters from the Party’s slogan falling off stage and a prankster handing her a fake P45, supposedly signed by Boris Johnson.
She had hoped to use the opportunity to bring the Conservative party together again and to demonstrate her capabilities in delivering Brexit. Although the speech was deemed as a disaster by some, the Pound actually strengthened further against the Euro as she addressed Brexit, saying that she was ‘confident that we will find a deal that works for Britain and Europe’. She also put minds at rest that European citizens living in the UK ‘are welcome here’ and will be pushing negotiations in this direction.
Bookmakers Betway now have odds of 5/6 that Theresa May will resign before the next UK General Election, after her speech yesterday, which could be catastrophic for Sterling exchange rates.
The week so far has been particularly rocky for the British economy and therefore the value of the Pound, after worse than expected Manufacturing and Construction data was released earlier this week.
Sterling did received a slight boost yesterday morning when Markit released their Services PMI data which came in a little better than expected at 55.3. Although this wasn’t enough to make too much of a dent on the losses seen earlier this week.
Chief Economist at the Bank of England (BoE), Andrew Haldane, will be speaking this evening at 6:30pm. BoE Governor Mark Carney has recently hinted towards potential a interest rate hikes in the near future, possibly even next month. If Mr Haldane echoes these comments we could see another boost for the Pound. However, credit rating agency Standard & Poor has predicted that an interest rate hike may not be happening at all, and that Carney’s recent comments could just be an effort to increase the value of the Pound.
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