Bank of England to dictate sterling exchange rates this week

This Thursday the Bank of England will release their latest interest rate decisions and investors will be watching this event closely. The general consensus is for no change, however it’s the forward guidance that investors will be looking out for.

The futures market last week  changed their forecasts as bets flooded in when average earnings numbers exceeded expectation. The future market is now predicted a 50% rate hike in May and a 80% hike in November.

Governor of the Bank of England Mark Carney will give his overview of the UK economy after the interest rate decision and I expect his overview to provide strength for the pound as UK economic data has impressed over the last 3 months and certainly exceeded many leading forecasters expectation.

However, I expect the governor to highlight that the Brexit transitional talks could influence monetary policy moving forward, which will stop the pound from making serious gains against the basket of G10 currencies.

In regards to the transitional talks, many key points need to be ironed out such as the UK leaving their borders open for another couple of years once the UK departs the EU in March and if the UK will adopt new laws in the transitional period once the UK leaves, nevertheless I expect in March the talks to go well which will pave the way for trade negotiations.

This week I am expecting the pound to finish the week on a high, which will provide opportunity for clients buying a foreign currency. For clients that hold a foreign currency and want to purchase sterling, it looks like now is the time to make that conversion.

When buying or selling the Pound its important to analyse both currencies that you will be trading (GBPUSD, GBPEUR, GBPAUD). If you would like to save as much money as possible feel free to email me with the currency pair you are looking to trade and the time-scales you are working too and I will email you with my forecast and the process of using our company drl@currencies.co.uk.

As a company we pride ourselves in the ability to get you a better exchange rate than your current currency provider or your bank. In addition we can outline your options and the potential future events, which will impact your exchange rate. This will help you to make informed and educated decisions.

*** Please note I am out of the office until Monday morning and do not have access to my emails. Therefore expect a response first thing Monday morning. Enjoy the rest of your weekend ***