GBP EUR Rates Poised Near 1.23 – Inflation Data Out Tomorrow

The pound set to make it a hattrick of daily gains versus the dominant dollar

Sterling is still poised to breach 1.23 in the near future provided UK inflation figures tom0rrow don’t damage the pound.  Last week’s Bank of England Quarterly Inflation Report did put the brakes on the pound’s recent rise as it pushed off the prospect of an early interest rate hike but the fundamental data for the UK of late has been pretty good, and if it continues to impress sterling could easily be testing new highs against the single currency.

Whilst inflation is one potential banana skin, we also have UK retail figures out on Wednesday morning alongside the latest BofE Minutes.  Whilst I do not expect the Minutes to add too much given Carney’s rhetoric at last week’s inflation report, it will prove interesting to see if any members of the MPC are thinking an early rate hike would be best – a move that could strengthen sterling. Retail sales can prove fickle depending on things like the weather, but once again a strong showing would reinforce the view that the UK is on the road to recovery slowly but surely.  My gut feeling is that we could see GBP breach 1.23 assuming inflation hasn’t caused any problems beforehand.

Sterling Aussie Rates are likely to be influenced by the RBA Minutes published overnight, as well as by the relevant UK data previously mentioned, but again I expect GBP AUD rates to bounce around just above and below the 1.80 mark for now.  It seems to be a good time for placing limit orders if you have a bit of time to play with to make sure you get the best deal on your currency exchange.

The pound is still looking very good against the US Dollar and has actually surprised me.  The very Dovish tone from Janet Yellen and the rest of the US Fed has kept the Dollar incredibly weak and in my view undervalued due to weak expectations on the prospect of a US interest rate rise.  However I am sure the US economy will keep ticking along and at some point the Fed will change their tone- when they do I am sure we will see the Dollar recover so it would be worth buying USD now whilst it is still very cheap.

If you would like to make a currency transfer and want to get the best exchange rate possible then we do offer a money transfer service with exceptional exchange rates.  Should you wish to find out more please feel free to email Colm at [email protected] and I would be happy to assist.