The pound is looking more and more vulnerable at present as the realities and uncertainties of the Brexit become more and more apparent to investors. The expectation for the pound is that it will suffer for an extended period of time, notably until we start to see some plans that will ultimately benefit the UK in the future. With Brexit unquestionably the main driver on this and nothing predicted to materialise for up to a year in terms of firm concrete plans over Brexit, we could be waiting quite some time for the pound to rally!
If you need to buy the pound with a foreign currency seeking out the higher levels seems the best way forward for the future. If you need to buy a foreign currency with the pound then getting something booked or looked at in advance seems sensible to avoid the uncertainty of the future.
Starting today we can look to the Jackson Hole Symposium for the next direction on global rates. This forum of global speakers is in the United States but will feature importantly Mario Dragh, head of the European Central Bank (ECB). He is predicted to potentially be looking towards discussing their Quantitative Easing (QE) program which would trigger some movements on the GBPEUR exchange rate.
QE has been an important feature on exchange rates for the last few years and it has seen big movements on the Euro which has affected GBPEUR and GBPUSD exchange rates. GBPUSD is affected because big movements on EURUSD influences the GBPUSD exchange rate. Next week is a whole host of important data but if you are holding sterling and hoping for a big improvement, it does feel like you are clutching at straws!
The overall expectation for the pound is that will continue to remain under pressure, if you have a transfer to make in the coming days, weeks and months then making some firmer plans sooner than later seems best. To double check your exchange rate and have a chat with an expert about the outlook for the pound please speak to me Jonathan Watson by emailing [email protected].
Thank you for reading and I look forward to hearing from you.