Average wage earnings are due out on Wednesday at 09:30, which could prove key as the BoE said at their last interest rate meeting that if inflation continues to grow, interest rate hikes could be made more quickly than expected. The below table shows the difference you could have achieved when buying £200,000.00 during the high and low trading points of the previous 30 days.
|Currency Pair||% Change||Difference on £200,000|
The week ahead could be key for determining monetary policy for this year, with Average earnings figures and unemployment data for December released on Wednesday at 09.30.
At the Bank of England's latest interest rate decision earlier this month, interest rates were kept on hold, but we saw a surge in the Pound's value after the Monetary Policy Committee stated that if inflation continues to rise and the economy can keep pace, then it is likely that interest rates will rise faster than originally anticipated.
Average earnings and employment figures this week will therefore be closely watched by the MPC in determining whether or not wages are moving in line with rising inflation and if the jobs market is in a healthy enough position to cope with a rise in rates. Therefore, if we see positive figures on Wednesday morning we could see a spike in the Pound's value for anyone buying foreign currency to take advantage of.
Another key set of data that the MPC will take in to their considerations will be UK GDP figures for the final quarter of 2017 on Thursday. The UK economy performed better in the second half of last year mainly due to strong retail figures and a pickup in global growth, especially from the US and Eurozone, and therefore I believe that Thursday's figures could paint a positive picture for the UK.
Once again this could provide Sterling sellers with a spike to take advantage of. Over the past month when we have seen the Pound make gains they have been very quickly reversed, so speaking with your account manager here to put a plan in place for how to take advantage of these brief opportunities could help you save money on your currency transfer.
One of the reasons for the Pound's gains being relatively short-lived is due to the uncertainty surrounding Brexit, and whilst the horizon is still so unclear I believe that the Pound will continue to be anchored by the lack of clarity for what the future holds. Speaking over the weekend, despite being told that things would be so much easier if the UK stayed in the EU, PM Theresa May made it clear that the Brexit decision was final and that there would be no second referendum.
She also stated that she wanted to waste no time in the UK leaving the EU's common foreign and security policy with a view to create a new security treaty by the beginning of next year. There will no doubt be further statements and developments on Brexit this week which have the potential to impact on the Pound's value, so keep in touch with your account manager here who can keep you up to speed with all the latest news and market movements.
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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