Sterling Forecast – Will the Pound Continue to Gain Value? (Matthew Vassallo)

Sterling has moved close to a three-month high against both the EUR & USD this week, offering further buying opportunities to those clients holding the Pound.

The markets continue to digest events from the weekend, with Theresa May’s Brexit speech last Friday and the German elections driving market sentiment early this week.

Much of the positive impact made by Sterling recently can be attributed to comments made by the Bank of England’s (BoE), regarding a prospective interest rate hike over the coming months.

With rising inflation in the UK an on-going concern, many are predicting that the central bank will have no option apart from to raise rates.

However, BoE governor Mark Carney was very clear during a speech last month that a rate rise could be dangerous, whilst Brexit negotiations were on-going.

With so much uncertainty around the UK economy and direction is likely to take over the next few years, I would not assume that a rate rise is inevitable over the coming months.

Therefore, those clients holding Sterling may wish to look at short-term market spikes, rather than gamble on longer-term sustainable gains.

Despite Theresa May outlining the government’s plans to move Brexit negotiations forward, we weren’t really told anything we didn’t already know.

It is likely that sentiment around our separation from the EU is going to drive market sentiment and investor confidence for months is not years to come. For that reason, I feel that any advance for Sterling is going to remain handicapped, at least to some extent.

Those looking for a valuation closer to 1.20 against the EUR and above 1.40 against the USD, would require in my opinion, a huge shift in market perception and conditions.

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 [email protected] to find out all the options available to you ahead of your currency transfer.