Sterling exchange rates have suffered over the last 12 months due to the British public voting out of the European Union, and I don’t expect this trend to change anytime soon.
This week Michael Barnier the EU’s leading Brexit negotiator made it clear that he is not impressed with the UK’s offer in regards to EU citizens rights within the UK once the UK leaves the EU. Reports are suggesting the UK want to be able to change their laws and restrictions in regards to the rights of EU citizens where as Mr Barnier wants EU rights to be protected.
Brexit negotiations will continue to put pressure on the pound and for people that are purchasing a foreign currency you have to accept that and in my opinion purchase your currency when the pound spikes in your favour or when the currency you are looking to purchase devalues.
This week the UK will release their latest inflation number Tuesday morning at 9.30am. Inflation has risen to 2.9%, 0.9% above the Bank of England’s target. It is no surprise inflation is rising as the pound has lost approximately 15% since the UK decided to vote out of the EU over one year ago.
Economists are looking to the Bank of England at present for any hints towards future monetary policy decisions. A way to combat rising inflation is to raise interest rates which would provide strength for the pound. However the Bank of England have been giving mixed messages over the last month or two.
Personally I do not believe the Bank of England are in the position to raise interest rates anytime soon, however I wouldn’t be surprised to see inflation rise Tuesday morning and therefore more pressure is put on the Bank of England. If this is the case I expect the pound to rise in value Tuesday morning and this could be the best time to buy foreign currency next week.
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** If you are purchasing the pound with a foreign currency, rates are fantastic at present however could get better. Outline your requirements to me and I will keep you up to date with market movement and potential opportunities. **