Sterling exchange rates continue to weaken, will next week bring change for the Pound?

The financial markets are geared up for what could be a busy week for GBP exchange rates next week. For the past month or so now the value of the Pound has been influenced by expectations of what the Bank of England will do at their next meeting on the 10th of May, one week from now.

At one stage markets were pricing in an interest rate hike completely. The expectation was for a move upward to 0.75% which would be the highest level since the UK exited the recession almost a decade ago.

In recent weeks a combination of weak economic data and political uncertainty has resulted in a fall for the Pound’s value. The reason or the fall was due to hopes of the hike fading, and once the governor of the Bank of England, Mark Carney ruled out when the next rate hike would happen the Pound fell immediately. In the lead up to this, Sterling was in the headlines for the right reasons after hitting an 11-month high against the Euro and a post-Brexit vote high against the US Dollar.

Now there is little hope of the 0.25% rate hike, hence Sterling softening. Some bulls are hoping for a 0.10% rate hike but after GDP figures showed a fall to a 5-year low in the first quarter of this year, I think this is unlikely and that we may even see the Pound fall further next week once no rate hike is announced.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.