The pound has been rising against all other currencies as investors take notice of the possibility of the Bank of England raising interest rates later this week. Expectations are high for the pound and there is now mounting expectation that we will see a rate hike, the key question is how will this influence the pound and will sterling continue to rise for the rest of the year?
Personally I think there are a number of unanswerable questions over the UK economy which will ultimately see the Bank of England and Mark Carney struggle to meet with expectations over the coming weeks and months. How consistent will economic growth be with all the uncertainty of Brexit hanging over us? Will Inflation fall back under its own accord?
The answers to such questions could easily go against the grain of the current sentiments and I believe overall it is more likely than not that the pound will lose more than it will gain for the rest of 2017. If you have a transfer to make buying or selling the pound the next week is crucial to the future direction on the currency market, understanding the market and all of your options in such conditions is a great way to minimise your exposure.
The headlines might suggest the pound could rise on the back of an interest rate hike but this is by no means guaranteed. Any lack of clarity or hawkish (strong) commentary from the Bank would see sterling lower, banking on big improvements could be a big risk. Mark Carney has earned himself a reputation for disappointing the markets, why would this time be any different?
For further information on how best to trade the UK Bank of England interest rate decision please do get in touch with me Jonathan Watson by emailing firstname.lastname@example.org.
Thank you for reading and I look forward to hearing from you.