The pound has been rather volatile lately but appears to be ending March on a real high note as recent high expectations are realised. The UK has agreed a transitional deal at the latest EU Summit which has given the market confidence for future progress to a favourable final deal and relationship with the EU.
The Bank of England also hinted at raising interest rates in May with two members of the voting committee, the Monetary Policy Committee (MPC), voting to hike now. With a May hike now almost assured the market will looking for clues of further evidence that would see a further hike or hikes down the line.
For clients looking to buy or sell the pound, the outlook is now more positive but sterling is far from out of the woods. A major concern will be the finalisation of a deal on Brexit which might take until the Autumn or even the end of the year. Trade talks are of particular concern and were always going to be the biggest challenge. The expectation for me is that sterling will go back to remaining sensitive to the news and could easily weaken from this recent point of strength.
Of course, any move lower should be more than tempered by the recent changes in the outlook for interest rates and also the progress we have seen on the Brexit, if you have a transfer you will need to make buying or selling the pound in the future this is well worth considering. Key news still this week will be the latest UK GDP news which is due tomorrow, it is worth bearing in mind too that tomorrow is the month and quarter end which could trigger some big movements on exchange rates, as well as traders, close off positions ahead of the Bank Holiday weekend.
For more information at no cost or obligation please speak to me Jonathan Watson by emailing [email protected].
Thank you for reading and I look forward to hearing from you.