This update discusses factors that could affect Pound Sterling exchange rates this week, looking specifically at the impact of poor inflation figures and other data due this week, whilst also provide a brief update on the EU Referendum.
Yesterday morning the UK released their latest Consumer Price Index and Producer price index yearly figures. Both data releases fell 0.2% and 0.1% retrospectively. The ONS (Office for National Statistics) have stated airfares, clothing, vehicles and social housing rent were the main reasons for the decline. The figures came in lower than expected which saw the Pound lose ground against all of the major currencies during the morning trading period.
Retail sales numbers are released Thursday at 9:30am and because of the fall we have seen with inflation numbers I wouldn’t be surprised to see Retail sales numbers follow trend. If this is the case expect further Sterling weakness on Thursday morning.
UKIP leader Nigel Farage has been back in the media suggesting the UK could hold a 2nd referendum if the ‘in’ campaign snatch a narrow victory. Mr Farage is continuing with his comments that the UK Prime Minister David Cameron has not played fairly in the lead up to referendum on June 13th because of the information leaflets the Government printed before campaigning begun.
I believe this is the first sign the ‘out’ campaign, and in particular Mr Farage, believes the UK public will vote to remain part of the European Union. Latest polls are suggesting the ‘in’ and ‘out’ campaign are neck and neck however bookmakers have the ‘in’ campaign clearly ahead and therefore favourites to win.
If you are selling the Pound to buy a foreign currency before June 23rd the longer you leave it there’s a strong argument that the rates will get worse. However if the UK remain part of the EU I believe there will be a snap back in your favour.
It’s important to analyse both currencies you will be trading feel free to get in touch for a forecast by emailing me firstname.lastname@example.org with the currency pair (GBPEUR, GBPUSD) the amounts and timescales and I will reply personally with a forecast.
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