The pound remains supported despite weaker construction data released yesterday as per the Purchasing Managers Index (PMI). Construction fell sharply in March as a result of the cold weather caused by the Beast from the East. UK construction fell to 47.0 down from 51.4 the month prior highlighting a contraction in the sector. Anything over 50.0 represents expansion and anything below shows contraction. The markets responded with a fall in the price of sterling although the data appears to have now been largely shrugged off.
Construction only represents around 6% on UK Gross Domestic Product but it is an excellent barometer of where things are heading in the economy and is usually one of the first sectors to dive before a downturn. The markets will be more interested in this mornings services data which represents a much larger share of the British economy at close to 80%. A strong number this morning could see some good opportunities for those clients holding sterling looking to buy Euros or buy dollars.
The pound is also being supported by the likelihood of a UK interest rate increase as soon as May as well as a perceived better outlook on Brexit. One of the main drivers in these coming weeks will be what happens in the third round of Brexit negotiations which cover the thorny issue of the future trading relationship. Expect to see major volatility on any positive and negative developments. In my view there are likely to be more twists and turns in the negotiations over these coming weeks creating good opportunities for buyers and sellers alike.
Those clients looking for higher rates could see some good opportunities to sell pounds on the back of any positive developments on Brexit.
For more information on sterling exchange rates and how to make the most of any opportunities to time your own transfer then please get in touch with me at firstname.lastname@example.org