Those clients holding Sterling have been given some respite over the past few days, with the Pound gaining a foothold against a host of the major currencies.
GBP/EUR rates hit 1.14 today, with GBP/USD touching 1.30 and GBP/AUD creeping close to 1.70.
Whilst the UK economy remains under pressure, for the most part to the uncertain political landscape and uncertainty over how Brexit negotiations will develop, the Pound at least drew some support after a tough few weeks.
Much of this improvement has been attributed to Bank of England (BoE) governor Mark Carney’s comments last week, where he indicated that the central bank could in fact raise interest rates over the coming months.
Investors immediately reacted positively to the comments, with Sterling making gains across the board.
However, despite this positive move I am continually wary about assuming this upward trend will continue over the coming days.
The general perceptions and feelings around the UK economy at present are hardly overly positive. We find ourselves in a unique and unsettling position, with many clients and investors alike concerned with the direction our county is taking under a fragmented government, who are already struggling to negotiate our separation from the EU.
There is no doubt that the Pound has been affected by a wave of negative media reports and market perception surrounding these key topics and until the direction our government is taking becomes clear and what sort of deal we can negotiate in Brexit talks, I fear the Pound will struggle to gain any sustained market support.
As I’ve advocated for some time the current market uncertainty means that client should be looking to towards short-term opportunities and not gamble on a sustained improvement.
Looking ahead and tomorrow we have PMI Construction data, always a key barometer for investors, along with the latest Inflation Report Hearings. These will be monitored closely due to the UK’s rising inflation levels and any further predicted rises could halt Sterling’s mini recovery.
Wednesday sees the release of the final set of PMI data for the week, with clients holding the pound hoping Services figures come in above 53.8 from last month.
However, it could be Thursday could hold the key, with the latest NIESR GDP estimate. This well-respected think tank has influence on investor confidence and any positive or negative outlook is likely to have an instant impact on Sterling’s value.
Finally, on Friday we have a host of Manufacturing & Industrial production figures, alongside our latest trade balance figures. Any increase in our trade deficit is unlikely to boost Sterling’s levels as we head into the weekend.
If you have an upcoming Sterling currency transfer to make you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company we have over eighteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.
Our award inning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.
Feel free to email me directly on firstname.lastname@example.org to find out all the options available to you ahead of your currency transfer.