Tomorrow’s UK GDP Figures Key for Sterling Exchange Rates! (Matthew Vassallo)

GBPEUR Sinks Again with Virus Case Surge

Tomorrow’s UK Gross Domestic (GDP) figures are likely to be key for any clients holding Sterling or Euro. With the expectation for 0.3% growth I expect additional volatility on GBP/EUR exchange rates if the figure comes outside of this remit.

Sterling had started to regain some ground against it’s EUR counterpart but fell away during yesterday’s trading. Rumours surfaced ahead of Bank of England (BoE) governor Mark Carney speech that he was going to take a dovish tone, which the markets immediately took as a negative and this ended the Pound’s mini recovery.

Whilst his comments were not overly positive he did mention a prospective interest rate hike due to UK Prime Minister’s prospective policy changes and this helped boost Sterling’s value and eliminate some of the afternoon’s losses.

GBP/EUR rates dipped to a low of 1.1132 but recovered back towards 1.12 following Carney’s speech. We’ve seen Sterling threaten a mini recovery on more than one occasion and European Central Bank (ECB) president Mario Draghi’s speech also curbed any further Sterling advances, as he commented on the current Quantitative Easing (QE) programme and how he felt it was having a positive effect.

I just feel that under the current market conditions the Pound will struggle to make any sustainable impact until at least next year, when key political elections and other factors in the Eurozone may start to drag the EUR value back down. If I was holding EUR I would still look to protect the gains I’d made and with a key data release tomorrow for the UK (UK Gross Domestic Product figures released at 09.30), I expect to see further market movement during Wednesday’s trading.

If you have an upcoming Sterling or Euro currency exchange to make and you are concerned by the increased market volatility of late, it may be wise to look at protecting the gains you’ve made, rather than gamble on what has become an increasingly volatile and unpredictable market.

If you would like to be kept up to date with all the latest market movements ahead of your currency exchange, 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 Matt. Alternatively, I can be emailed directly on [email protected]