Sterling update and forecast – Sterling expected to start a negative trend for the next month starting maybe as soon as today

This morning’s market is a difficult to read as we have two large economic events, one of which is probably the second largest of the next 3 months.  At 9:30 BST we have UK unemployment levels which are expected to show a fall in the levels of unemployment across the UK.  This would normally create Sterling strength in the build up to the event and when confirmed but today I am not so sure. Most traders I think will be waiting until the report at 10:30 BST before making their decisions. This is when the Bank of England release their Quarterly Inflation Report. Mark Carney surrounded by his relatively new team at the Monetary Policy Committee will report on inflation figures in the UK and the latest forecasts. All this information will be hugely influential in the forecasts on when interest rates will climb in the UK.

Currently the markets are split between it being the end of the year or the start of next, however with the economic data for the UK missing targets, real wages falling and that fact that Europe is struggling there is I think a real possibility that his comments could push back forecasts for a hike into 2015. This could quite happily weaken the GBP against every currency by potentially a large amount today so is a real risk for anyone with a currency transfer in the medium term.  On top of that and further afield we have to be aware that we are less than 30 days away from the Scottish referendum. This is the vote that is taking place across Scotland to decide whether they stay as part of the United Kingdom.  This has a huge amount of uncertainty around it and is very likely to have a negative impact on Sterling’s value.

I personally think that we will see a negative trend for the Pound start in the next fortnight but there is the potential that it could start as soon as later today.  So if you have a currency need within the next 3 months I would strongly suggest you break radio contact if you have not spoken to a specialist about your situation already and get in contact. Contact myself STEVE EAKINS via email at [email protected] and I will give you a call with a personal, no obligation chat to discussion your options, possibly strategies and quotations.