All media stations this week were suggesting that Theresa May planned to give some clarity in regards to Brexit and more importantly offer the EU an amount of Euros to depart ways, which would open the door for trade deal negotiations. However the UK Prime Minister disappointed the currency market and outlined more of the same points we already knew.
Sterling exchange rates fell throughout Friday when the Prime minister gave her speech however across the board sterling exchange rates are approximately 3-4% higher than where they were 4 weeks ago.
This week the UK are set to release their latest GDP numbers Wednesday morning. As I have outlined in previous articles the Bank of England announced that they could be raising interest rates as early as November this year. If the yearly GDP numbers exceed 1.7%, then some economists will suggest that all of the jigsaw pieces have aligned and an interest rate hike is inevitable.
This week I wouldn’t be surprised to see sterling start slowly, due to speculators continuing to sell off the pound because of Theresa Mays speech and then if the GDP numbers impress the pound should recover. For people that are buying or selling pounds this week should also analyse the other currency that you are converting.
For example, Germans will be heading to the polls today, and it is likely Angela Merkel will secure her position as chancellor for her fourth term. If this is the case I wouldn’t be surprised to see GBPEUR rates dip off early in the week and then potentially recover off the back of the GDP numbers.
If you are making a currency conversion in the upcoming weeks or months, I would recommend emailing me with the currency pair you are converting (GBPEUR, GBPUSD) the reason for your transfer (business transaction, property purchase) and the timescales you are working to and I will respond to your email with my forecast and the process of using our company firstname.lastname@example.org.
Enjoy the rest of your weekend and I look forward to speaking with you Monday morning.