A slightly quieter month so far in terms of news and economic data will soon give way to plenty of fresh information that could move exchange rates. Sterling has already hit some stumbling blocks falling against the Euro and could well be struggling against other currencies. Manufacturing and Industrial data showed the UK is performing well in these areas, UK GDP for Q4 was also shown to be up 0.2% according to the NIESR (National Institute of Economic and Social Research).
Despite this more positive news the pound has actually struggled a little. I believe this is in part due to the lack of clarity over Brexit and also concerns about the ‘Trade Balance’ figures which were shown to have increased dramatically. This means that despite the much weaker pound we have at present a clear sign the UK is still buying more from overseas than it sells. This situation is actually deteriorating too which is not good. One of the big arguments for Brexit was that a weaker pound would boost the UK economy and whilst some areas are improving, overall the UK is not benefitting.
Expectations for the UK are slightly improved following the withdrawal agreement from last month, but ultimately there is still a very long way to go for Brexit and therefore the pound and the UK economy. If you are considering buying or selling the pound against any currency in the coming weeks, there are some key pieces of data due next week which could influence the rates. Notably, UK Inflation data and also Retail Sales figures.
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Thank you for reading and I look forward to hearing from you and assisting in the future.
