The pound has rallied today across the board after much stronger industrial and manufacturing production figures were released which have provided a boost from the British economy. Rates for GBP EUR have broken back over 1.13 once again whilst GBP USD has climbed above 1.32 for this pair.
Further support for the pound has stemmed from a UK Gross Domestic Product (GDP) estimate from the National Institute for Economic and Social Research (NIESR) which has predicted GDP will rise to 0.5%. This particular release is used a good barometer to what the official numbers will look like and the data is stronger than expected.
The official GDP numbers two weeks ago climbed to 0.4% so anything stronger is only going to help support the pound further. All in all it has been a good end to the week after there have been some wobbles at these higher exchange rates particularly where GBP EUR is concerned. Clients looking to buy Euros may wish to see if the rally continues into early next week and consider taking the higher levels available.
Where next for the Pound?
The bottom line is the economic data for the UK isn’t looking too bad at the moment and so it is just the ongoing Brexit negotiations which are keeping sterling exchange rates at bay. Until sufficient progress is made on the divorce settlement things are not likely to change too quickly. It has been reported today that the EU want to see progress within the next two weeks and for Britain to provide vital clarification on the divorce settlement or the negotiations may not continue. The next two weeks could be crucial. If Britain and the EU can come to some sort of arrangement then the pound could see a sharp boost higher.
Until March 2019 however there does of course remain the risk of a no deal scenario. As optimistic as I may be that there should be a deal in place by the end of the period the other scenario of a no deal is entirely possible and would almost certainly be negative the pound, in the short term at least anyway. This prospect will not go away until a deal is signed in March 2019 and is likely to keep pressure on the price of sterling.
EU Gross Domestic Product figures are released next week and could see some market reaction considering the recent decision from the European Central Bank to start tapering its massive Quantitative Easing programme.
To discuss how these changing events both politically and economically have an impact on your personal transfer then please get in touch. Our service can help clients achieve better rates of exchange than the banks and other companies and assist in the timing of any conversion. Please feel free to contact me at firstname.lastname@example.org