Sterling vs the Euro has remained relatively strong compared to recent weeks after the recent gains caused by the probability of a UK interest rate hike in November.
Rumours are that there is a chance of just over 60% for an interest rate hike but in my opinion I think this would be far too early.
Clearly inflation is too high and typically a central bank would increase rates to combat rising inflation.
However, with average earnings not keeping up with rising inflation I think we could see problems for the UK’s growth is this happens.
Therefore, I think the Bank of England have been ‘jawboning’ which means talking about possibly doing something in the hope that the market reacts according to their agenda.
The Brexit negotiations however are keeping Sterling under a lot of pressure and we are now in the fourth round of discussions this week.
Until we get some clarity going forward I think the Pound will struggle to make any serious gains vs both the Euro and the US Dollar.
At the same time however the Euro has come under pressure owing to the German election.
Although Angela Merkel won for the fourth successive time she will need to form a coalition which is likely to involve a total of three parties.
If you have a currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency.
A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Tom Holian) on [email protected] and I will endeavour to get back to you as soon as I can.