The pound has seen yet another good day with gains across the board as it continues to climb higher against the Euro following a good run last week and gains in excess of 0.6% today. The surprisingly strong rhetoric from US President Barack Obama who has put forward his reasons for Britain to remain in the EU has no doubt helped the pound rally. His comments have been so forceful that the markets have reacted aggressively. Bookmakers are now also pricing in a greater chance that Britain will remain in the EU and have adjusted the odds accordingly as a result of the US Presidents’ influence. His trip has helped create a good buying opportunity for anyone holding sterling moving into any other currency including the Euro.
UK GDP figures for the first quarter are released on Wednesday providing the next major British economic release which is likely to impact on the pound. The National Institute for Economic and Social research (NIESR) recently forecast GDP would fall from 0.6% from the last quarter of 2015 to 0.3% for the first quarter of 2016. This is a substantial fall and could to a certain extent be attributable to uncertainty surrounding the EU referendum. My view is that any slowdown will actually be as a result of a weaker manufacturing sector. A weak official figure could see the pound weaken on Wednesday. Buyers of Euros may be wise to take advantage of the excellent spike that we have seen over the course of the last two weeks as there may be a another rocky patch around the corner especially if the Leave campaign get their act together and put forward some stronger arguments to withdraw from the EU which should be expected soon.
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