The Pound has continued to trade in a very tight range over the last week failing to make too much headway against either the Euro or the US Dollar. However, there are a number of economic data releases that could start to make the Pound move quickly. Read on to learn more.

The table below displays the change for a number of GBP currency pairings during the last 30 days:

Currency Pair% ChangeDifference on £200,000
GBPEUR2.2%€5,050
GBPUSD2.1%$5,850
GBPZAR4.1%ZAR 71,000
Wage growth rises above inflation

Unemployment levels to impact the Pound

On Wednesday the UK announces the latest set of Unemployment data for the last three months as well as Average Earnings data.

Average Earnings do not appear to be keeping up with inflation levels and this is causing a problem for the Bank of England about what to do with monetary policy. The central bank has recently suggested that an interest rate hike may be required in order to control inflation which remain above target and the recent suggestions are that we could even see a rate hike as early as May. In theory this could help to strengthen the Pound if this does take place as it could encourage more investment in the United Kingdom for a higher return.

Although unemployment has remained very positive for the UK and is currently close to its lowest levels since records began over 40 years ago, the real problem for the UK remains inflation.

UK Growth Expectations

On Thursday the UK releases the latest GDP figures for the final quarter of 2017. As this is the first estimate this can often result in a lot of movement for the Pound so it is important to keep a close eye out on the release. The expectation is for growth of 1.5% year on year so anything different could cause a lot of movement for Sterling exchange rates.

Like with Average Earnings, the strength of UK GDP will have an influence on what the Bank of England does moving forward with monetary policy so contact your account manager to discuss your current requirement.

There are two very important events taking place as we go into March with Chancellor Philip Hammond due to announce the latest Spring statement as well as Phase 2 of Brexit negotiations.

Hammond will set out the latest economic forecasts and this will take place on 13th March. Hammond has been rather cautious previously so if he takes the same approach this could see the Pound struggle. The Brexit talks are likely to take centre stage so if they go well this time they could provide the opportunity that many have been waiting for. However, as we have seen in the past the previous talks have been long winded and we are still a long way from any clear resolution.

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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.