The first Thursday in a month is always a busy one with UK and European Interest rate decisions. No changes are expected but the new ‘forward guidance’ could play a role on the sterling side and Draghi’s press conference will probably see more movement than the actual ECB decision. For a full overview of important news on exchange rates and what to beware of this month you can ready my post from earlier this week here.
Sterling will surely remain reasonably well supported today although should we see a reminder from Mark Carney he expects no interest rate hike until 2016 and that traders ‘bets’ of a hike before then are misplaced, sterling may suffer. I think if you are buying the pound, it is worth buying on the dips because on the whole the much improved data is sterling positive, as is the fact the UK is for now outside of any conflict.
I think if you have a sterling purchase moving sooner may be wise or if selling Euros or Dollars waiting until the possibly Euro and Dollar positive events. The Euro positive event may be the German elections 22nd September and the USD positive event the US Fed decision on the 17th September. As I say sterling is looking well supported so if you are buying the pound with these currencies these are the days you may see improvements. Conversely if you are purchasing Euros or Dollars you may wish to move ahead of these events to get better rates. On the Aussie dollar we have elections this weekend down under which may also help the Aussie to strengthen.
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