Sterling Supported after Better Unemployment Data (James Lovick)

Pound to Dollar forecast: Sterling continues to decline against the US Dollar

The pound has received a small but welcome boost after yesterday’s unemployment data which held steady at 4.9%. This number largely represents the period in the run up to the referendum which highlights that jobs were not being lost before 23rd June.

The claimant count measure for July (post Brexit) however actually improved with the number of individuals claiming unemployment benefit falling by 8600 to 764,000. It is a small ray of light post Brexit.

UK retail sales numbers this morning are released and represent the month of July which too is post Brexit. There will be a lot of interest in these numbers today. Last week other retail sales numbers from the British Retail Consortium showed online and high street sales at the highest levels in 6 months. A strong figure this morning could see a small rally for sterling today. I believe there is a high chance the retails sales numbers could impress which should be good for the pound, in the short term anyway.

The issue for sterling exchange rates at the moment is that the real effects of Brexit are still unclear. Hopefully there will be some great clarity after the summer recess for Parliament but it is going to be a rocky ride going forward and the Brexit process will take time. It would be unwise to think otherwise.

Clients looking to buy Euros or any other currency should consider their options and look at the data that is coming out as leaving everything to chance in the hope of a better rate is rarely the best strategy. If you would like to discuss your individual requirement and the options available then this is something I can assist with.

GBP USD

The US Fed minutes released last night showed the Fed are still considering raising interest rates later this year. A wait and see approach is being adopted as the Fed want to see some more solid growth figures. I am pencilling in an interest rate hike for the US in December. I believe there will be insufficient data for the US to hike in September whilst the November meeting will be just one week before the US election.

Depending on the election result that would leave December as the most likely to time to hike which would be exactly one year since the last rate hike. Politics will very much be the order of the day this Autumn and I believe there will be intense volatility for the dollar.

If you have an upcoming GBP or EUR currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on jll@currencies.co.uk