Since the Brexit vote from last June we have seen the Pound fall by as much as 15% against the Euro which highlights how important it is to keep a close eye on how quickly the rates can move over a period of time.
We are now just over a month since the Brexit negotiations began and as yet it has not been decided whether the UK will opt for a soft or a hard Brexit and this is causing the Pound to continue to struggle against both the Euro and the US Dollar.
With the Bank of England voting earlier this month 5-3 in favour of keeping interest rates on hold there was there a sign that interest rates may be going up later this year but with this week’s statements by both MPC members Andy Haldane and Ben Broadbent that interest rates are not ready to go up this has led to the Pound falling since the comments.
Even though UK unemployment rates are at their lowest level since the 1970s the real issue for the British economy is that of Average Earnings which are not keeping up with rising inflation. This essentially means that although more people are in work the cost of living is rising which is not good for our economy.
Eurozone Trade Balance is due out at 10am this morning and in recent times this has been very positive so I expect to see further gains for the Euro vs the Pound if the data supports the expectation.
For anyone with a US Dollar currency transfer to make in the short term then keep an eye out on what may happen with US inflation data later this afternoon.
Fed Chairlady Janet Yellen was quizzed about further interest rate hikes in the US earlier this week so if inflation comes out at 1.7% as expected then this could cause further USD strength vs the Pound as it provides further support for another US interest rate hike.
If you would like to make a currency transfer and would like to save money compared to using your own bank then contact me directly for a free quote and I look forward to hearing from you. Alternatively if you’re used a currency broker and would like to compare rates then get in touch…
Tom Holian firstname.lastname@example.org