At the end of trading last week the pound plummeted against all of the major currencies. Foreign Minister and former Mayor of London Boris Johnson claimed that the UK are getting ready to trigger article 50. However Martin Schulz was in London Friday and had a meeting with UK Prime Minister Theresa May, he stated that he felt that the UK Government is undecided about how and when to trigger article 50.
I am in doubt the dip in sterling exchange rates is due to the Brexit news on Friday. Rumour has it that Article50 will be triggered early next year, however until then I believe the uncertainty will continue to put pressure on the pound and investor confidence, therefore a contraction in the UK economy is just around the corner.
The Office for National Statistics reported last week that they feel confidence in the Service sector has dropped, however last months figure certainly didn’t support this, as they showed a record rise. The Service sector figures are so important as they make up 80% of GDP, therefore if the ONS are correct we should expect further falls for the pound in the future.
With the pound falling approximately 1% against all major currencies Friday, I wouldn’t actually be surprised to see the market level out Monday morning and the pound therefore make back some of the losses. If this is the case this could be the best levels we are going to see this week.
Looking ahead for the week the two data releases to look out for are Mortgage approvals Thursday morning and Gross Domestic Product numbers Friday morning.
The mortgage approvals data gives a good indication to the health of the housing market and therefore investment into the UK and GDP measures the total value of goods and services produced by the UK.
Both data releases could hurt the pounds value as its been reported people are holding off buying property in the UK until they know the impact Brexit will have on the housing market. Furthermore if the ONS are correct and are expecting falls in the service sector this will have a detrimental impact to GDP numbers.
If you are reading this website in order to find out information in regards to buying or selling the pound I can help you get the best exchange rates on the market whilst keeping you up to date with economic information. Its important to analyse both currencies you will be trading therefore I would recommend emailing me with the(GBPUSD, GBPAUD, GBPCHF etc) the reason for your trade (company invoice, buying a property) and I will email you with my forecast and the process of using our company [email protected].
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