Last week the pound experienced major volatility against the G10 currencies. UK Prime Minister Theresa May and Brexit Secretary David Davis announced early in the week that the UK would be leaving the single market and customs union. The announcement came just before head EU negotiator Michel Barnier arrived in the UK for a week of Brexit negotiations.
Thursday, The Bank of England decided to keep interest rates on hold at 0.5%, however the quarterly inflation report suggested that average earnings should continue to rise throughout the year and inflation would fall. Couple this with Governor of the Bank of England Mark Carney announcing that unemployment levels will remain at record lows, the pound recovered the losses from earlier in the week and made further inroads against all major currencies.
Unfortunately for people purchasing a foreign currency, the gains were short lived as Michel Barnier released a statement Friday afternoon suggesting there are substantial disagreements in regards to the transition period and if the disagreements continue quite simply there won’t be a transition.
After Friday’s release, Theresa May confirmed that within the next three weeks she will deliver a speech which outlines the UK’s position in regards to Brexit, however in the meantime other Conservative MPs will be outlining their own thoughts.
This week it will be Boris Johnson that will be in the spotlight (Wednesday afternoon) and rumours are suggesting his speech will try to unite people that voted to remain and leave. Certainly a tough topic and with Johnson’s track record, if he deviates off course, this speech could be a risk for clients purchasing a foreign currency.
In regards to economic data releases, UK Inflation numbers are released on Tuesday morning at 9.30am. The consensus is for a slight fall which could cause a small boost for the pound. To finish the week, on Friday Retail Sales is released at 9.30am. Last months Retail Sales numbers completely disappointed therefore I expect this figure to exceed expectation which means the pound could finish the week well.
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 [email protected].
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 ***