Pound Sterling Forecast

The pound has continued its mixed performance according to on going international sentiments. I think it is fair to say that the poor state of the UK and its finances is hampering any kind of major comeback. On the data front the key market  mover will be whether or not we see QE this Thursday, but there is also a host of other data including Manufacturing and Industrial Production data as well as Trade Balance data. House price data this morning showed a small 0.6% increase in the last month according to Halifax, although they are down 1.8% on last year. Last weeks PMI data was generally positive but I think the underlying sentiments show that the UK is suffering. The recent run of not so bad data may mean any further QE is on the backburner for the time being however.

Against the Euro the pound is still touching the excellent highs seen for most of the year. Aside from the above data the key news story will surely be the outcome over Greece. I feel focus will be on not only Thursday’s QE decision but also whether or not the ECB cut rates on Thursday. There is definitely the chance of some big movements around this time as investors second guess the outcomes. It is worth noting that GBPEUR has been range bound at 1.19-1.2150 in the last month which is not massive when you consider the continued pressures on both currencies. We may well see the rate break out of this range this week depending on the outcomes of the above events.

Whichever way the market moves we can help secure preferential and commercial rates of exchange. For a full discussion of all the events affecting your trades please feel free to contact me direct on jmw@currencies.co.uk