Sterling exchange rates have recovered towards the end of the week following the Bank of England’s announcement that the next policy change would likely be an interest rate hike rather than an interest rate cut which had been discussed recently.
UK interest rates have now remained on hold for seven years and with the ECB having cut interest rates to 0% last week and the US Federal Reserve also not interfering with monetary policy earlier this week this has caused Sterling to recover against the Euro and hit a 5 week high to buy US Dollars.
The talks of a Brexit have kept Sterling under pressure but there is an argument that this is now looking like it is being priced in and it could be argued that we have hit the bottom?
However, the uncertainty of the next few months is likely to cause pressure for Sterling and we only need to remember what happened 3 weeks ago when Mayor of London Boris Johnson announced that he would be joining the Leave campaign. This caused Sterling to drop very quickly against the Euro and Dollar.
Next week UK inflation is released on Tuesday followed by Retail Sales on Thursday.
If we see inflation data come out better than expected we could see Sterling rise against both the Euro and the US Dollar by mid week.
The biggest day to keep your eyes on if you’re considering exchanging US Dollars will come on Thursday when the US publishes Initial Jobless Claims. This is likely to cause a large amount of movement for GBPUSD exchange rates and if worse than expected could see Sterling increase against the US Dollar.
Indeed, GBPUSD rates have now broken through 1.45 as Sterling exchange rates end the week on a high.
If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian email@example.com