The Pound has remained under a lot of pressure during July and as we enter a new month we could be set for further volatility for Sterling exchange rates in the weeks ahead. The Sterling report below looks into the way that the upcoming interest rate decision and speech from Mark Carney could impact GBP rates. The table below shows the range of exchange rates for a number of currencies throughout the past 30 days highlighting the importance of timing your transfers correctly to maximise youre return.

Currency Pair% ChangeDifference on £200,000
GBPEUR2.2%€5,050
GBPUSD2.1%$5,600
GBPAUD2.1%AUD $7,200

This morning we could see a small bit of movement for the Pound with the latest release of UK manufacturing data at 09:30am. However, it appears as though the main focus will be on tomorrow with Super Thursday due to cause movement for the Pound.

At midday tomorrow the latest interest rate decision is due to be released and the expectations appear to suggest that we’re headed for an interest rate hike at the meeting. At the same time the UK’s Quarterly Inflation Report is also set for release.

Inflation has been running higher than the government’s target of 2% for too long and this has been one of the reasons cited for a rate hike. Combined with this week’s mortgage approvals data the reasons are increasing in favour of a rate hike.

Indeed, although the most recent retail sales data showed a fall as England performed so well at the most recent World Cup and the weather has hit the hottest levels in decades when this does get released later this month this is likely to help both GDP and provide further evidence in support of a rate hike.

Reasons why the Bank of England may change monetary policy

Reasons why the Bank of England may change monetary policy 

Typically, when the Bank of England increases interest rates this would usually provide the Pound with a boost against a number of different currencies but I think we could see the Bank of England provide a very cautious approach.

Bank of England governor Mark Carney has previously been rather negative in his approach to Brexit and I think even if we do see a rate hike tomorrow we may not see the big gains that many may expect.

One of the reasons why we may see a rate hike tomorrow is that the Bank of England may even think about cutting interest rates next year when the Brexit deadline approaches. If we cast our minds back to what happened two years ago the Bank of England dramatically cut interest rates following the Brexit vote in order to encourage consumers to continue to spend and reduce their monthly bill by cutting rates.

Therefore, this is why I think a rate hike now will allow the central bank some room for manoeuvre if we get to a stage where there is a ‘no deal’ with the European Union.

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

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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.