With the Pound currently sat in a very tight trading range against many currencies, Tom Holian discusses what to expect for Sterling exchange rates during this week. The table below shows the change for a number of GBP currency pairings in the last 30 days:
|Currency Pair||% Change||Difference on £200,000|
The Pound has remained in a very tight trading range recently against a number of different currencies as it appears as though the markets are waiting for further progression as to what will happen with the UK’s relationship with the European Union.
Theresa May has suggested that ‘no-one will get everything they want’ but she is also positive that a deal will be able to get done. In a message to the EU she also went on to say that ‘Let’s get on with it.’ With the EU summit now less than two weeks away I think the Pound could be entering into a very volatile period against a number of different currencies.
The recent performance of ecoonomic data has highlighted the problems caused by the uncertainty of what is happening with the Brexit talks.
On Friday morning the UK released it latest set of both Industrial Production data and Manufacturing data as well as the latest Trade Balance figures for the UK for January. All three announcements showed a fall compared to the expectation highlighting the problems caused by the uncertainty of what is happening with the Brexit talks.
However, one positive was that Trade Balance data outside of the European Union showed growth compared to the expected numbers which provides evidence that the UK is improving elsewhere.
According to the Office for National Statistics Construction data showed a fall of 3.4% in January from December which was the biggest monthly drop in over five years. Combined with a fall in manufacturing this sector of the British economy is clearly under pressure at the moment.
The latest NIESR GDP estimate for the last three months showed a slowdown and is expected to continue to fall owing to the recent snowy weather which will inevitably have a negative impact on Sterling exchange rates.
Tomorrow the Chancellor Philip Hammond will announce the latest Spring Statement for the UK. Hammond has suggested previously that the statement will contain ‘no spending increases..and…no tax changes’ and is likely to last about 20 minutes.
However, it will be interesting to see what tone is used as this is likely to have a big effect on Sterling exchange rates. Therefore, if you’re considering making a currency transfer then make sure you contact your account manager who will be able to keep you up to date with what is happening to exchange rates.
In terms of economic data this week there is little out for the UK so all eyes will turn to what is happening politically which could impact the Pound.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me directly at firstname.lastname@example.org.
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