This Pound Sterling update look at Sterling's current value and discusses how it could be affected this week. The below table shows the market movements for a number of currency pairings in the last month:

Currency Pair% ChangeDifference on £200,000
GBPEUR5.31%€11,540
GBPUSD5.27%$13,620
GBPAUD6.06%AUD $19,640

Friday’s data releases harm the Pound

If something’s good it doesn’t often last long in the currency markets. Sterling performed well against most of the currencies last week up until Friday, when a series of below par data releases halted the Pound in its tracks.

Resilient Pound in favour with the markets

Throughout the month of September the Pound rose a total of 4.98%, meaning a difference of over €12,000 from the month low to the month high. However, Friday brought a harsh reminder that the UK’s position at the minute is still vulnerable and still in my opinion extremely sensitive to any negative data.

Gross Domestic Product (GDP) figures for the year were released and although they showed that the UK economy grew by 1.5% this year, this did not match up to analysts’ expectations, and as a result the Pound took a hit in early morning trading.

Adding to the woes on Friday was the release of Britain’s current account figures, with the account deficit growing from £22.3bn to £23.2bn, failing analysts’ expectations that the UK current account would have shrunk to £16bn.

Is a UK interest rate hike imminent?

Despite the negative data releases on Friday, Mark Carney, Governor of the Bank of England kept the hopes of an interest rate decision alive. The prospect of a rate hike in the UK has been the main reason for the Pound's recent strength and although there was a drop off in sterling across most of the majors on Friday, Sterling still remains buoyed by such hopes.

If I was looking at buying currency with sterling in the short term, it may be a wise idea to act sooner rather than later. Many analysts are not as optimistic regarding the prospect of a hike as Mark Carney, with Citibank and JP Morgan advising now is the time to sell Sterling, citing wage growth, Brexit concerns and now annual growth the main reasons as to why the Bank of England won’t hike rates just yet.

What could influence Sterling this week?

A new month brings in a host of new data for economists to chew on. This week, manufacturing, services and construction data is released. This could be of significant importance to sterling’s value next week, a poor reading or a signalling to a slowdown in any of these sectors will feed into fears that the economy isn’t strong enough at present to warrant a rate hike and could cause sterling to decline further.

Politically, Prime Minster Theresa May is expected to face her party and will be closely watched following her recent speech to see if her party’s attitude towards Brexit has changed and to see if they challenge her leadership. If it appears that her party aren’t all on the same page and disagree with her views, I would expect volatility on Sterling exchange rates.

For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353.

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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.