Bank of England the focus for sterling this week!

GBP/EUR Exchange Rate: Shock BoE Rate Cut Sends Sterling Higher Against Euro

The Bank of England will take the focus this week with their meeting on Thursday which could see some volatility for the pound. Expectations are centered around a weaker sterling if the Bank of England fail to hint at any future rate hikes and I personally would not be surprised to see sterling lower. Any change in the value of sterling could be short-lived so if you have a transaction to consider and wish to capitalise on any sudden improvements, please email me on jmw@currencies.co.uk to highlight your position.

A key reason for the Bank of England not raising interest rates back in May was the lack of growth in the UK economy. Blamed largely on the ‘beast of the east’ weather conditions, economic growth in Q1 was poor. What could prove very interesting for the Bank of England to consider will be the recent GDP (Gross Domestic Product) data which showed a fall in GDP over the course of Q2.

The general impression had been the Bank of England will link raising interest rates to growth having used this as a reason not to raise in May. With GDP so important to the Bank of England’s calculations, the likelihood for me will be a weaker pound as the market scrambles to review the prospect of any interest rate hike in 2018, which for me now, looks much less likely.

Clients buying or selling the pound are now faced with a key piece of news which could move exchange rates, preparation is key to maximising any deal as it gives you the opportunity to lock in any sudden improvement. If you have a position that you will need to consider in the future, please feel free to contact me Jonathan to run through the market, your options and what strategies might suit you best.

Please use jmw@currencies.co.uk and ideally, please include a number. Any information provided is completely free of charge and at no obligation.

Thank you for reading and I look forward to discussing the market and your situation soon!