The Pound has had one of its most positive weeks of the year so far against a number of major currencies including against the Euro.
Earlier in the week the tone surrounding Brexit was a lot more positive and so far nothing has come out from the EU summit to cause too much concern.
A transitional deal appears to have been agreed and this has helped the Pound to make some welcome gains hitting the best rate to buy Euros since May 2017.
On Wednesday the Pound was given another boost with the latest set of Average Earnings data which showed that they have outpaced inflation for the first time in a very long time. With wage growth on the increase combined with high inflation this in my opinion means that we could be seeing an interest rate hike coming in May.
On Thursday the Bank of England voted 7-2 in favour of keeping interest rates on hold in the UK so there is clearly some appetite and room for the central bank to raise rates in the near future.
Bank of England governor Mark Carney was rather bullish about Thursday’s decision and suggested that the UK’s economy has been improving which provides support for a future rate hike.
As we end the month one of the most important data releases will come on Thursday with the latest set of UK GDP data for the final quarter of 2017.
If we see a positive revision then I think we could see Sterling break through recent highs and start next month on a positive footing.
However, it would be worth exercising some caution as we have seen GBPEUR rates rise close to where we are at the moment a number of times recently so could this be another false dawn for the Pound?
If you would like further information about what is likely to affect the value of the Pound and would also like a free quote then please email me directly and I look forward to hearing from you.
Tom Holian [email protected]
