The pound has struggled to find many positive days in recent weeks, however, over the course of this morning we have seen sterling exchange rates creep up against all major currencies.
The majority of this can be put down to a minor shift in sentiment and that investors and speculators alike appear to have some confidence behind the expected economic plans being muted by new Prime Minister Liz Truss.
Expectations are for an economic package of £130 Billion to be announced in due course which would include the capping of energy bills (a huge talking point as discussed in yesterday’s post), bolstering economic growth (extremely important with a recession looming), and limiting inflationary pressures.
All of this support can only be deemed as a good thing presently but the devil will be in the detail, whilst the pound has received a slight uptick off the back of the initial words it is likely that the markets will be waiting to find out the true plans before we see what this truly means for Sterling exchange rates.
One area that may cause turbulence for the pound is that new PM Truss plans to review the Bank Of England’s mandate during her campaign, this will likely cause uncertainty for the pound as and when more information comes out as two of the biggest market movers for a currency can be political and economic uncertainty, and with a storm cloud brewing between the Government and Bank of England, this would likely cause both political and economic uncertainty so it is certainly one to watch out for moving forwards.
Anyone with an imminent trade should have a keen eye on the markets this week and be prepared for anything, as news on the plans for the new PM will continue to filter through over the course of the week causing volatility for the pound.
If you do not have time to watch the market (which moves by the second) then let us help you with that, we watch markets all day every day and have a variety of tools to help you avoid adverse market movements making your transaction more costly. Email me (Daniel Wright) today by emailing [email protected] and we will be happy to help you.