Amidst a quiet week of data for the UK, Phillip Hammond, Chancellor of the Exchequer helped to lift the Pound into new positive territory. This report looks at the events which could shape Sterling exchange rates moving forward.
In the table below you’ll find high to low exchange rate movements for a number of GBP currency pairs during the last month, and the resulting difference when exchanging £200,000.
|Currency Pair||% Change||Difference on £200,000|
The Pound has now gained against the Euro for 5 consecutive days since the 7 March, rising from 1.1150 to 1.13054. This is an extra €3000 on a typical £200,000 transfer to a well-informed client of Foreign Currency Direct.
The question now is will the Pound hold on to these gains? Many analysts believe that the Pound’s new resistance level is 1.1270 following the recent bout of positivity regarding the UK economy and Brexit negotiations. A resistance level is known as a level that the currency struggles to breach as trader will often offload the currency for fear of the value dropping afterwards.
I personally feel as though the Pound will struggle to stay above the 1.13 level until the EU summit, which is scheduled for next week.
Sterling will remain at the mercy of the global markets which are currently being tested by President Donald Trump’s recent import tariffs potentially spelling a trade war, and could come under pressure next week from important inflation data, wage growth data and all-important interest rate decision. Lloyd’s Bank yesterday moved forward their prediction of an interest rate hike to May 2018, with Brexit cited uncertainty the biggest factor as to why the Bank of England can’t raise rates just yet. If this is the case, I would expect Sterling to remain under pressure short term, so it may well be worth looking at current levels to execute a trade.
With a quiet end to the week for anticipated, it may well be worth looking at booking a trade and taking advantage of current levels before the volatility starts again next week.
Tensions are starting to mount between the UK and Russia following the death of an ex Russian spy 10 days ago in Salisbury. Whilst Russia categorically denies being involved in the killing, Moscow failed to explain how a Russian military grade nerve gas was found on the ex-Russian spy. Political tensions are often negative for the currency involved, it may be worth keeping an eye on developments of this story.
For more news on upcoming events that could affect foreign currency exchange rates, call our team of currency brokers on 01494 725 353.
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