Much of today’s focus centered around UK Chancellor Philip Hammond’s Spring Statement, which was predictably upbeat and bullish in its delivery.
The Chancellor signaled stronger growth, despite the on-going market concerns around Brexit, with UK Gross Domestic Product (GDP) forecasts upgraded from 1.4% to 1.5%. Whilst this was only a modest improvement, the government also expect borrowing to decrease throughout the year and inflation to fall back to their 2% target by 2019.
The Pound reacted positively throughout the day, making gains against most of the major currencies.
GBP/EUR hit a high of 1.1297, whilst GBP/USD hit 1.3994, with the Pound continuing to put pressure on 1.40. This positive spike can most likely be attributed to the weak US wage growth report, which cast doubt over whether the US Fed would raise interest rates at their next policy meeting on March 21st.
Up until his report the US economy had seemingly been on a constant upward curve, which meant investors started to factor in multiple interest rate hikes this year, which helped boost the USD’s value. On top of this President Donald Trump’s current ‘trade wars’, where is he looking to heavily tax any imported steel or aluminium products, has also put pressure on the USD, which in turn has helped to boost Sterling back up towards the current levels.
With investors moving their funds away from the USD over the past couple of days, Sterling has benefited and it now seems as though the Pound could once again move through 1.40, which has become a key threshold for the pair and indeed many of our clients.
However, a word of caution as this trend may not last should the FED decide to hike rates later this month. This possibility, alongside the underlying concerns surrounding Brexit negotiations and which direction the UK economy will take over the coming months, could easily put pressure back on the Pound.
In fact if we look at recent trends on the pair this is exactly what has happened and therefore it may be prudent to take advantage of the current spike and remove any risk from any upcoming Sterling currency exchange.
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 winning 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.