Pound Sterling Forecast – Sterling hits two-month highs against the dollar
The pound continued it’s positive start to the week during Wednesday’s session rising to a 2-month high against the US dollar and a 3-week high against the euro.
£100,000 is buying €3000 and $9000 more vs the low of the last month. If purchasing an overseas property or running a business with currency exposure. The pounds gains have significantly reduced the cost.
The last few weeks has been full of negative economic data for the UK. The Office for Budget Responsibility (OBR) believe that the UK economy is already in a recession.
Yesterday saw the release of monthly services and manufacturing PMI data in the UK and eurozone. PMI data measures the performance of both sectors and is a key barometer for the performance of an economy. A reading above 50 indicates an expansion while a reading under 50 indicates a contraction.
Last month, weak PMI data caused a sterling sell-off. However, Novembers data was less negative than expected with services PMI reading 48.8 vs expectations of 48 and manufacturing at 46.2 vs expectations of 45.8. The pound rose against a number of currencies including the euro and dollar following this release.
PMI data was also less negative than expected in the eurozone which helped the euro gain further ground against the dollar. The single currency has gained 7% against the greenback in the last 3 weeks.
Dollar weakness against euro and the pound is a signal that global risk-appetite is shifting once again. Over recent years the pound has become bound to risk sentiment. When investors are willing to take risks the pound rises in value. When they are not, the pound loses value.
The pound has opened the day slightly softer across the board. Economic data will be light over the next couple of days. There will be no data from the US due to the thanksgiving holiday.
At Lumon, we have several different contract options that can help you minimise risk during uncertain times in the market. We can also set rate alerts and monitor the market for you.
If you have any upcoming requirement involving any currency, and wish to speak with a specialist, please feel free to reach out directly onbuyinproperty= [email protected]