The Pound came under renewed pressure against the Euro towards the end of the week even after the Bank of England chose to increase interest rates from 0.5% to 0.75% on Thursday.
The Pound briefly touched toward 1.13 in the thirty minutes following the announcement but then the press conference confirmed what a lot of people have been thinking in that it will be some time before we see another interest rate hike.
Part of the reason for Thursday’s decision was to allow the Bank of England room to cut rates next year if things continue to falter concerning the Brexit talks.
On a currency transfer of £200,000 the difference was as much as €1,8000 from the high to the low which highlights the importance of being well prepared for movements on the currency markets.
The rate decision saw the first hike since last November and the base rate is now back to where it was in 2009. However, Bank of England governor Mark Carney reinforced the doubters by saying that the risk of a no Brexit deal was ‘uncomfortably high.’
As we go into next week there are a number of data releases due out which could affect Sterling vs Euro exchange rates.
Next week on Friday the UK will release the latest UK GDP data and this is expected to see a growth from 0.2% to 0.4%. The first quarter was relatively low but that was blamed by the ‘Beast of the East’ weather so it should come as no surprise that the data will see an improvement.
Therefore, in terms of much movement I think next week will be rather limited so if you’re comfortable with where rates are at the moment and want to save money compared to using your own bank then contact me directly for further information and I look forward to hearing from you.
Tom Holian [email protected]